Taipei, May 8, 2008 (CENS)--Contract price of 1GB dynamic random access memory (DRAM) module soared 10% early this month, recording the steepest rebound since the latest bottom-out, according to on-line market clearinghouse DRAMeXchange.

DRAM chipmakers expect contract price of the module to further surge to US$23 in the back-to-school season from current US$20 partly thanks to expansion slowdowns and capital-expenditure cuts at major DRAM chipmakers including Hynix Semiconductor, Qimonda, and Intoera.

Hynix saw its DRAM bit sales increase only 5% in the first quarter alone as a result of output capacity reduction. In the meantime, Qimonda`s bit sales posted a negative 9% increase. Migrating to 70nm process, Inotera slowed down output in the first quarter.

From mid-March to early this month, average price for branded DDR2 1Gb 667MHz chips shot up 11.3% to US$2.16 from US$1.91 and the price for no-brand DDR2 1Gb chip even soared 27.5% to US$2.04 from US$1.6.

DRAMeXchange`s market-research fellows pointed out that tight supplies already led DRAM chipmakers to hike contract prices of the module by 3-5% in late period of April and another 10% early this month.

For single chip, the price surge is even higher. According to DRAMeXchange` price quotation board, 1Gb DDRII spiked 12.5-14.29%, higher than expected 5-10%, to average US$2.13 apiece. DRAM chipmakers expected the price to further increase to US$2.5 in back-to-school season.

Taiwanese chipmakers benefiting from the price raise include PowerChip Semiconductor Corp. (PSC), ProMos Technologies Inc. and Nanya Technology Corp. while module beneficiaries include Transcend Information Inc. and Power Quotient International CO., Ltd.

Market upturn led to a 12.5% revenue increase at PSC and a 15.88% gain at ProMos last month alone. ProMos had NT$2.67 billion (US$89 million at US$1:NT$30) last month.

The unexpected pace in price rise has inspired industry watchers to expect NAND Flash price to go likewise. Some NAND Flash suppliers pointed out that NAND Flash prices had been "very firm" recently and not inclined to fall.

Memory-module makers are expected to be the primary beneficiaries of the latest price surges as they supply both DRAM and NAND-Flash products, according to insiders.

(by Ken Liu)