Thanks to an oversupply DRAM prices are continuing to drop. By mid-November the contract price of a 4GB DDR3 memory module was $15.5 (R130) after a 7.9% drop while the price of 2GB DDR3 modules was down to $9.5 (R79)after a 7.3% drop. OEM PC builders are to blame for the price drop due to lack of demand on their part and even cancelled orders which is due to a slowdown in the OEM PC market.
To combat the oversupply DRAM manufacturers Elpida and Nanya have decreased their production capacity but the effects of this downsizing will only be felt next year. Elpida has decided to cut its capacity by 25% at its Hiroshima plant. Until then the market will remain in a state of oversupply which will keep prices low. In some cases the prices of DRAM has dropped below the manufacturing costs which has put smaller memory manufacturers in a tough spot. Wafer manufacturers have also dropped their production which in one case has been as much as 90%. If DRAM demand continues to be low this could result in DRAM manufacturers being forced to merge resulting in an oligopoly.
Source : Xbit Labs
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