May 12, 2010

Expect memory prices to slide in May, rebound in June

Converge Memory Update.

The memory market, specifically for modules, has been showing some signs of weakening over the past four weeks. Although activity in the spot market for DDR2 and DDR3 modules has been relatively light since late February, pricing has remained stable. However, as a result of the lack of spot market procurement, prices for 2GB DDR2 and DDR3 modules are showing signs of coming down. Another factor that Converge believes has added to the pricing instability was the unexpected announcement that the contract price for 2H April had settled at stable to slightly down. As Tier 1 box builders weigh the option of reducing memory content for upcoming shipments in consumer desktop and notebooks, supply seems to be catching up.

Judging by the tone of numerous memory vendors, we could see the spot market price continue to slide a little over the next three weeks as we approach the long holiday weekend in the U.S. Converge believes that any further drop for DDR2 and DDR3 memory will be minimal. Pricing is expected to stabilize and possibly rebound by the beginning of June as the industry begins to prepare for the build season.

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