512 MB of DRAM 1Gb replaces as mainstream PC chip
November 1st, 2007 | by Fitri |The 1Gb DRAM chip has replaced 512 MB of DRAM and the ability to integrate memory in the PC industry beginning in October, according to DRAMeXchange, a sign most PCs fall off production lines can now use Microsoft Vista OS. All versions of Vista Premium require more DRAM for the PC to ensure smooth functioning of the OS, which is more complex and requires more hardware than its predecessor, XP.
The shift in the DRAM market has taken longer than many companies expected. Several manufacturers of DRAM built new factories in anticipation Vista take the PC market this year by the storm and antiquate XP. That has not happened. Instead, the adoption of the new operating system is moving along at a steady pace, albeit more slowly than the industry expects DRAM.
The heavy investment in factories DRAM, in contrast, caused a massive overproduction. Prices of most DRAM chips have fallen by more than 70 percent so far this year, and are currently near or below the cost of production for most companies.
The contract price of 1 GB DDR2 DRAM chips running at 667 MHz has fallen from 12.5 percent two weeks ago at $ 2.63 each, for a new low this year, according to DRAMeXchange, which manages a commerce site online for the chips. The most recent sagging DRAM struck in early October, as prices fell 25 percent. Analysts said the market may not turn around until the end of next year, and perhaps later, if the companies continue to make new production lines.
“We do not expect to memory chipmakers show any improvement in profitability, at least until [the second half of 2008] unless there is a stabilization or recovery in pricing,” said Warren Lau, industry analyst at Macquarie Research chips.
Samsung Electronics already increased its spending plans production line by 23 per cent this year, he said, the aggressive and will likely cause rivals such as Elpida Memory and Hynix Semiconductor to follow suit so that they can protect or increase their share of the market for DRAM.
Increased spending in the midst of a DRAM chip glut should be cheap for some time. Market prices normally take about a month to filter to users, according to one analyst DRAMeXchange, users can benefit from lower prices in some ways. Often, the PC vendors increase the amount of DRAM computer when prices are low or offer other DRAM as an incentive to buy a new PC. Also, the price of DRAM modules found in retail stores fall clear that their older, more expensive inventory.
Contract DRAM prices are renegotiated every two weeks between DRAM makers and PC vendors such as Hewlett-Packard and Dell. About 80 percent of all DRAM is sold by contract, while the rest is sold on a spot market similar to trading in oil and gold.