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Inventory gluts out

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The DRAM market may have bottomed out - temporarily -, with prices tipped to rise over the next couple of months.

DRAM prices coming into the US from Taiwan on the spot market today stood at between $2.40 and $2.65 for 64MB chips (PC133), while 128MB chips were priced at $3.95 to $5.20.

This means prices are almost back to their mid-January levels (when they started their current downward trend) - on January 22 64MB DRAM chips cost $2.80. Prices reached a low of $2.25 on March 5.

But prices have been slowly rising since the first week of March, according to IDC, and are tipped to continue on their upward trend.

Jim Cantore, IDC programme manager for memory worldwide, attributes the move to two factors.

"I'm hearing that the PC OEMs are starting to re-order DRAM memory," he said, suggesting that the OEM inventory problems that have plagued the industry since last year are easing.

According to Cantore, the DRAM industry anticipates that Q3 will see the end of excess inventory.

ElectronicNews this week reported that Samsung expected its PC OEMs to work through their inventories by April.

DRAM price rises can also be attributed to current seasonal changes, Cantore points out. Japan and Korea end their fiscal years around now, and with the scramble over to shift stock before year-end, prices are expected to continue to rise slightly in April and continue their gradual climb in May. ®

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ElectronicNews article

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