By Nick Farrell
6 January 2009, 15:22

THE SPOT PRICE of DDR2 1Gb eTT chips has finally gone up after dropping down the loo for most of last year. According to DRAM Exchange the price has increased from the lowest 0.59 USD to recent 0.92 USD, a range of 56 per cent since mid December.

The price of DDR2 667 Mhz 1Gb chips also rallied from 0.58 USD to 0.78 USD with the range of 34 per cent. The reason for the sudden boom in prices is the fact that Taiwanese DRAM vendors slashed back on production and kept a large number of chips out of the shops. PSC cut back on capacity cut in September, Elpida, Promos, Nanya, and Inotera all followed, and managed to get the total worldwide production of DRAM down by about 20 per cent.

However all is not jam for the DRAM vendors. They still have those OEMS demanding ever cheaper products and the contract price has been sliding faster than a bucket of eels performing Torvell and Dean's greatest hits on ice. Most PC OEMs had already cut back on shipment targets downward and DRAM Exchange thinks it might be as grim as negative growth.

Bean counters think that more production cuts are likely. Taiwanese vendors such as PSC and Rexchip will delay their 50nm process schedule and only proceed with the 65nm switch to keep competitive. Nanya and Inotera will switch to Micron's stack technology, they may adopt the technology migrations with more steps such as taking 68nm first and later deciding the 50nm process depending on the market situation.