Samsung tests higher DDR DRAM prices

Contract negotiations

Samsung is seeking to raise contract prices for DDR DRAM parts, a company rep said today. This may not be a significant statement - Samsung investor relations vice president Chu Woo-Sik was responding to questions at a press conference announcing the electronics giant's Q3 results.

Contract prices are struck every two weeks and are based upon the prevailing spot market price. DRAM prices in Q4 typically rise, as PC makers buy in for the pre-Christmas build-out. It is questionable if this buying surge will take place this year, so deep is the retail PC doldrums.

Samsung, the world's biggest and most profitable DRAM maker, is not powerful enough to force prices upwards buy itself. And with the DRAM supply overhang, there is little evidence of an industry-wide ability, call it a cartel, if you will, to raise prices.

Samsung is forecasting a recovery in the semiconductor industry in the second half of next year. It says it has the product mix and cost structure to overcome a slump.

On product mix, Chu Woo-Sik notes that 256MB DDR DRAM still command a price premium and that "specialty products" are priced 2.6 - 4.4 times higher than commodity SDRAM, AFX Newswire reports. "When the synchronous DRAM chip prices fell 50 per cent in the third quarter, our DRAM average selling prices dropped to mid-3 usd from high-3," he says. ®