DRAM prices begin recovering

Ending a steady decline this year, contract prices for dynamic random access memory chips began rebounding early this month on expectations of a growing demand for computers as a new school year begins and with the emergence of computer operating systems requiring high memory densities, such as Windows Vista.
DRAMeXchange, a Taiwan-based market observer, said yesterday that per-unit price of DDR2 512M 667 MHz chips, the key DRAM product among chips, returned to the $2 range on July 1. The price, after peaking at $5.88 per unit earlier this year, nose-dived to as low as $1.66 last month. DRAMeXchange releases price data every 15 days.
As the spot price for that DRAM chip, mostly used in computers, stood at $2.30 per unit late last month, market watchers projected that its contract price would also pick up soon. Spot prices tend to precede contract prices by several weeks. Microsoft’s memory-hungry Vista operating system as well as seasonal factors such as Christmas and the beginning of a new semester will further boost DRAM sales in the latter half of the year, experts forecast.
CJ Investment Securities said in a recent report that the DRAM price is expected to surge this month, having a positive influence on the share prices of Samsung Electronics and Hynix Semiconductor. The two chip producers sell over 80 percent of their DRAM products based on contract prices.
Buoyed by the jump of those chip prices, Samsung Electronics saw its shares climb 6.1 percent to 627,000 won ($682) on Friday, the largest leap since October 2004. Hynix shares also advanced 4.7 percent during the same session.
NAND flash memory is also seeing its price recover, largely driven by the recent release of Apple’s iPhone, which uses the chip for primary storage. The spot price for a 4Gb single-level cell NAND flash, for example, has nearly reached $8 this month, from a low of $4.20 in March. The contract price is advancing from around $4.50 in March to $5 this month.
“The Apple iPhone signals the emergence of another killer application for the NAND flash market,” said Lee Jeong, an analyst with Hana Daetoo securities. “The phone that went on sale is expected to have a positive impact on domestic memory chip producers.”
Experts also expect the new iPod slated for release later this year will send flash memory chip prices up.

By Seo Ji-eun Staff Writer [spring@joongang.co.kr]