DRAM makers cutting production to prevent price-decline

DRAMeXchange has reported worldwide commodity DRAM output continues to shrink going into the second quarter, PC OEMs have already begun restocking, which has benefited contract prices. Continuing the fourth month uptrend, 4GB contract price increased by 8% in 1HApr., with an average price of US$25.5 and a high of US$26. This marks the fifth consecutive month of DRAM price increases, and a historical high of US$30 is not far off. Rest of the analysis by DRAMeXchage: With the rise of smartphones and tablets, the decline of PC shipments is an established fact. As such, DRAM suppliers are gradually focusing their production plans on other DRAM products like mobile and server DRAM, both of which are more profitable than commodity DRAM. As supply adjustments are made, commodity DRAM supply and demand will gradually return to a more balanced state. Furthermore, uncertainties due to the merger between Micron and Elpida have pushed PC OEMs to restock early, which has contributed to the DRAM price uptrend. While recent events like the March 27th earthquake in Taiwan and the North Korean missile threat have not significantly affected DRAM supply, but buyers may be anticipating shortages and restocking early to avoid supply problems down the road. However, as commodity DRAM output has decreased, the DRAM market has become a seller's market; with PC OEMs scrambling for stock, cost has i...