With spot market prices for DRAM memory hovering around US$1 per gigabit, contract prices are set to rise 5-10% in March, according to industry sources.

DRAM contract prices for March were previously anticipated to go much higher amid concerns that Elpida Memory's possible exit from the DRAM industry might cause a decrease in supply, the sources indicated. However, a continued slowing in end-market demand has discouraged PC OEMs from replenishing inventory causing March prices to likely see less-than-expected growth, the sources said.

Chip suppliers are still negotiating March quotes with their OEM clients, which refuse to accept the requested up-to-10% increase, claiming a lack of a visible rise in demand, the sources disclosed.

DRAM spot prices, which previously soared to top US$1 on the news of Elpida's bankruptcy, recently edged down slightly to just under the mark, the sources observed.

Rising demand for tablet PCs has led to a shrinking market for conventional PCs and notebooks. DRAM memory, mainly used in older computer systems, is being consumed less causing an oversupply.