DRAM contract prices for the second half of November, due to sluggish demand from PC OEM makers, dropped by nearly 8% sequentially, according to industry sources in Taiwan.

Because the PC market is going into the traditional off-season, PC OEMs have decreased orders for DRAM, the sources indicated. In addition, tight supply of hard disk drives due to the impact of flooding in Thailand has diminished shipments of PCs and, in turn, demand for DRAM, the sources pointed out.

Contract prices for a 2GB DDR3 module and a 4GB DDR3 module have slipped to US$9.5 and US$17.5 respectively on average, falling by 25% from a month ago, the sources noted. As equivalent contract price of US$0.95 for a 2Gb DDR3 chip is much higher than the spot market price of US$0.75, DRAM contract prices are likely to fall further by the end of 2011, the sources indicated.

Japan-based Elpida Memory and Taiwan-based Powerchip Technology, Nanya Technology and Inotera Memories have reduced DRAM production, with the total monthly input of wafers decreasing by 15.4% from a maximum of 1.3 million units in 2011 to 1.1 million units currently. However, it will take at least two months to reflect the reduced input of wafers on decrease in DRAM output, the sources pointed out. In contrast, Samsung Electronics and Hynix Semiconductor have not planned to cut production and are keeping their upgrade schedule to 20nm process, an equivalent of increasing output, the sources indicated.