DRAM price plummet 22% on-month in October on sluggish demand

DRAM

The price of memory chips, a core product of Korean chipmakers, plunged more than 20 percent in October from a month ago due to sluggish demand amid global economic downturn.

According to market tracker DRAMeXchange on Monday, the contract price of DDR4 8Gb, widely used in personal computers, contracted 22.46 percent on month to $2.21 in October, recording the first drop of more than 20 percent in two years. The figure is also down 40 percent from a year ago.

The DRAM price has been on a downward spiral since September last year after peaking at $4.1.

TrendForce, a market researcher in Taiwan, attributed the latest plunge in DRAM prices to the faster than expected rise in chip inventories since the third quarter amid the shrinking demand. As the world¡¯s top three memory markers Samsung Electronics, SK hynix, and Micron Technology turned more aggressive in selling their chips during negotiations for fourth-quarter shipments, the fall in DRAM prices has accelerated, according to TrandForce.

NAND flash memory (128GB) prices also declined 3.73 percent from a month ago to $4.14 in October. Its price has fallen 2 to 3 percent every month since it turned to a downward trend in May.

The world¡¯s chip demand in the IT sector has subdued faster than expected due to growing concerns over global economic slump, according to the market tracker. Despite the sluggish demand, Samsung declared in its earnings call last Wednesday that it would not reduce production. Because Samsung Electronics commands about 40 percent of the global DRAM market, its decision to keep production as planned will further accelerate price downfalls, which could hit a bigger blow to smaller rivals SK hynix and Micron, No.2 and 3 players in the market.