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RAM prices set to 'free fall'

Tablet love is cutting suppliers' throats

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Not content with merely rolling downhill, the price of RAM is set to drop off a cliff as the PC market slows, according to IHS iSuppli.

The average selling price for DDR3 with 2 gigabit density, which is the bellwether DRAM product, is projected to drop to $1.60 in the third quarter, down 24 per cent from $2.10 in the second quarter.

"A dramatic oversupply and free-falling prices are in store during the third quarter for the DRAM space, resulting in a turbulent second half for besieged DRAM suppliers," the analysis house said.

The fourth quarter could see pricing continue its tumultuous tumble another 22 per cent to $1.25 – "dangerously close to cash costs for many manufacturers".

Just a year ago, the price of typical memory for laptops and PCs was $4.70, but recessional woes and tablet-love have combined to cut the throat of PC demand. What little demand there is exists more in the lower end of the market, where big RAM is not a priority.

"A weakening DRAM market will encourage manufacturers to optimise their product mix, moving toward increased production of a higher-margin memory such as NAND flash," said IHS.

Tablets and smartphones often use NAND flash memory, and laptop-manufacturers have also featured it in ultra-thin notebooks or netbooks pitched as alternatives to tablets. ®

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