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Soft PC Demand Makes DRAM Prices Slip in 2010

Dynamic random access memory -- aka DRAM -- pricing continued to slip in December, as levels plunged to their lowest point of the year, market watcher iSuppli reported Jan. 4.

DRAM is commonly used in servers of all types for boot-up and other purposes; it stores each bit of data in a separate capacitor within an integrated circuit. Since real capacitors leak charge, the information eventually fades unless the capacitor charge is refreshed periodically. Because of this refresh requirement, it is considered a dynamic memory as opposed to SRAM (static random access memory).

As of Dec. 10, the contract price for a 2GB Double Data Rate 3 (DDR3) DRAM module stood at $21, down more than 50 percent from $44 only six months ago. The nosedive in pricing is not restricted to DDR3 alone: Prices also have plummeted in the previous-generation DDR2 devices, declining to $21 in December, compared with $38 in June.

"DRAM prices in general have been affected by soft PC demand -- especially during the first half of 2010 -- as well as by greater supply of commodity memory following a solid increase in bit shipments during the second half," Mike Howard, principal analyst for DRAM and memory at iSuppli, said. "That lethal combination of falling demand and growing supply has coalesced to place a great deal of pressure on DRAM ASPs."

The decline in prices means that it has become considerably less expensive for PC original equipment manufacturers (OEMs) to load machines with more DRAM. DRAM content per PC, which grew by 24 percent in 2010, is forecast to expand by more than 33 percent in 2011.

As long as DRAM costs equate to less than 10 percent of the ASP for PCs, manufacturers will continue to increase the memory content in their computers, Howard said.

iSuppli predicted that DRAM prices will continue their downward move for at least the first half of 2011, with 2GB DDR3 modules dipping to less than $15 by the end of Q2.

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Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...