A persistent seasonal weakness in demand is still weighing on memory chipmakers, prompting Samsung Electronics to suspend its supply to PC OEMs, including Dell and Hewlett-Packard (HP), according to industry sources. Hynix Semiconductor and Nanya Technology, on the other hand, have grabbed this chance to increase their supply to these PC OEMs, the sources added.
Since demand for memory is still weak at the moment, PC OEMs are aggressively requesting for lower quotes. They are now requesting prices of US$14 and US$28 for 512MB and 1GB DDR2 modules, respectively. According to DRAMeXchange, contract prices for 512MB DDR2-533 and a 1GB DDR2-667 modules were US$17.50 and US$35, respectively, in the second half of May.
With some DRAM makers already seeing prices being eroded below production costs, Samsung took the lead in rejecting such low prices by suspending its supply, the sources noted. However, rivals Hynix and Nanya have utilized this chance to increase their supply to PC OEMs.
Local DRAM module makers are already seeing their suppliers tending to be cautious about supply these days. When the spot price of DRAM edged to US$1.30 earlier, some DRAM makers started holding their stock to prevent further losses while having their capacity allocated to other products to compensate the lost from DRAM production.
According to Transcend Information, the recent price rebound seen in the spot market is a reflection of DRAM makers' suspended supply to the market, though the price rebound is coming at a relatively rapid pace. Kingmax Semiconductor observes a similar trend, and hopes that a healthier price trend will be seen after mid-June.
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