DDR D-RAM Prices Below the $3 Level

The cost of DDR (Double Data Rate) D-RAM, or memory semiconductors, is dramatically dropping. In the spot market, the cost per piece decreased to the $2 range for the first time. In about a month after breaking the $4 range in January this year, even the $3 range has shattered.

Above all, one of the causes behind this rapid drop in DDR cost is that the main memory products imbedded in PCs have changed from DDR to DDR2 substantially. However, as excessive supply is also a cause, it is expected that memory manufacturers such as Samsung Electronics will have worsened profitability.

According to D-RAM Exchange Inc., an online intermediary company of D-RAMs, on March 1, as of Tuesday morning, the spot price for 256Mb DDR D-RAM (32M X 8 with a speed of 400 MHz) was $2.85-$3.50 (average price of $2.92), a decrease of 6.1 percent from that of the previous day. In early April, the price for DDR D-RAM skyrocketed to as high as $6.51 or so, maintaining the $4 range on average. But starting this year, the prices rapidly plummeted.

The lowered price in the spot market was reflected in the fixed transaction cost that was applied for mid-and-long term supply contracts, with the final price at the range of $3.63 as of the end of February. There is a reason for the price drop: starting from the latter half of last year—July to December—Intel launched computers and chip sets for servers, using DDR2 D-RAM with a speed four times higher than that of DDR, and PC manufacturers started to use components made by Intel to a great extent.

Do-Young Kim nirvana1@donga.com