Spot price for 64M-bit DRAMs sinks below US$6

The price for mainstay computer memory chips sank below the US$6 level Thursday, continuing a slide that has now seen more than 30 per cent shaved off the price in the last three months. Analysts, however, said pricing might be about to rebound.

The spot market price for 64M bit, PC133 DRAM (dynamic random access memory) chips dropped around 10 percent Thursday. In one of the steepest one-day declines seen recently, by the end of the day 64M-bit, PC133 DRAMs were selling at an average of US$5.61 per chip, according to the American IC Exchange (AICE), an online exchange for memory chips and other semiconductor devices.

From a high of $8.91 reached during June, the price began falling in mid-July to settle at around $8.50 before rapidly heading south during a six-day period beginning Sept. 13, when the price dropped from $8.25 to $6.85.

As the price for the chips fell, so did pricing for memory modules containing the chips. According to AICE, the price of 128M-byte PC133 modules dropped 13 per cent Thursday to US$98.80 per module, down from $146 per module in July and below the $100 mark for the first time since May.

“It’s going to be painful [for the DRAM makers],” said Eric Ross, San Francisco-based vice-president of semiconductor research at Thomas Weisel Partners LLC. Despite the downward pricing trend, however, optimism still reigns in the industry, Ross said. “Major DRAM manufacturers are all speaking about how the demand seems to be very good and they are expecting to see the DRAM price increase.”

Earlier this month, Tokumasa Yasui, executive vice-president of Elpida Memory Inc., the new joint venture DRAM maker formed by NEC Corp. and Hitachi Ltd. said he expects to see the market improving soon. “Maybe the market direction will be clear in October. I think in October or November prices will increase,” Yasui said.

Most of the DRAM makers are betting on prices rising as seasonal orders for memory chips are received. So far, however, much of this demand has not surfaced yet.

“Generally, what happens in a normal year is that you’d see the back to school PCs being built in September and components bought for them in July and August,” said Ross. “Then there’s December, which is a bigger season. They are expecting to see DRAM bought in time for December but we have not yet seen the big buy yet.”

AICE, in Aliso Viejo, Calif., can be reached at