The price of DRAM chips underwent a serious drop because Hynix dumped significant quantity of its DRAM ships in the market.
According to Silicon Strategies, Fusion Inc. an independent distributor, claims it has noticed a significant drop in DDR (double-data-rate) SDRAM prices.
The prices have taken a dive by more than 10 percent in the open market. This happened when South Korea's Hynix Semiconductor Inc. allegedly dumped 5 million 256-megabit DDR SDRAM devices in China, according to a report issued by Fusion.
Hynix Semiconductor is practically barred from selling its memory chips to the US and EU countries, hence to sustain its market share Hynix needs to ship a lot of products to Asia where competition is strong.
Prices were moving towards the $7.00 mark. "However pricing briefly flirted with this level, but the combined effect of OEMs withdrawing from the market and Hynix taking advantage of inflated prices by reportedly dumping five million 256-Mbit discrete DDR devices into the market through China, had a chilling affect on pricing," according to Fusion.
Prices went down further as many were caught unaware and speculators further contributed to the price erosion by unloading additional products into the market to avoid the risk of getting caught in a losing situation.
Fusion said that 32MB (32x8) DDR SDRAM chips fell from the $6.65 range to the $5.30 to $5.90 range per device, depending on manufacturer. While the 32MB chips with different organization – 16x16 – moved from the $6.80 range to the range of $5.50-$6.00 per chip.
“We expect to choppy DDR pricing over the next several weeks with the 32 x 8 fluctuating between the $5.10 to $5.70 range and 16 x 16 configured product to sell in the $5.65-$6.00 range,” Fusion believes.