DRAM contract prices, which had stopped falling since October, began to trend downward in early November as PC OEMs slow down procurement amid concerns about disruptions to their supply chains caused by Thailand's floods, according to DRAMeXchange.

PC OEMs anticipate their shipments will be negatively affected by hard drive shortages arising from the flooding, and therefore have turned cautious in placing orders with their memory suppliers, said DRAMeXchange.

Early November contract prices for 2GB DDR3 modules averaged US$10.25, down 2.4% while those for 4GB parts slid 2.6% to US$18.50, DRAMeXchange disclosed.

At the spot market, prices for 2Gb chips have fallen to as low as US$0.70, down 9.6% since the beginning of November, DRAMeXchange indicated. The level is even below cash costs for all manufacturers including major ones using their most-advanced processes to produce chips, DRAMeXchange said.

With the oversupply situation likely to persist through the first half of 2012, chipmakers are looking to scale back their output aimed at improving the situation, DRAMeXchange believes. Meanwhile, the DRAM sector might go through a major restructuring with less-competitive players being eliminated, DRAMeXchange suggested.

DRAMeXchange predicted that DRAM bit growth worldwide will drop to only 28% in 2012, compared to 40-50% usually in the past.

Pei Lin Pai, spokesperson for Taiwan-based Nanya Technology, also commented that contract prices are really too low. There is little room for further falls, Pai observed.