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Contract 128Mb, 256Mb DRAM prices start to rise

Green shoots of recovery?

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Long-term contract DRAM chip prices have risen over the last month by up to 11.11 per cent, Korean market watcher DRAM Exchange reports.

As of 17 October, 128Mb SDRAM chips were being sold under contract for $1.50, up 11.11 per cent on September's price. The cost of 256Mb parts also rose - though by one 3.3 per cent - to $3.10.

Couple that with the fact that Far Eastern spot prices have been broadly stable this week - $1.02-1.04 for 128Mb chips; $2.67-2.70 for 256Mb parts - and some local analysts are cautiously predicting that the market may finally be starting to turn around, the Korea Herald reports.

Caution is important, however, as most observers believe the price increases have come as a result of PC makers increasing their orders. This is why the price rises have affected the contract market rather than spot prices. Reasons cited include: anticipation of a recovery in the memory market; an upswing in the PC market; and fears that international transportation may become restricted if the war in Afghanistan continues for much longer.

Indeed, that final factor recently forced Taiwan's Institute for the Information Industry to warn that a recent upswing in orders for components wasn't the sign of recovery that many suppliers were hoping for. Instead, it was simply short-term stock-piling, and higher orders today would be followed by reduced demand tomorrow.

Demand was beginning to pick up again until the events of 11 September crushed what could have been a recovery in memory sales. Next month's figures should give a good indication whether that upturn has begun again and if it's a sustained recovery. ®

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