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DRAM Contract Prices Increased in April

Despite oversupply, contract prices for DRAM increased about 5 to 6.5 percent in the first half of April, according to researcher TrendForce.The av

erage contract price of 4 gigabyte (GB) DRAM modules increased 6.58 percent, while the 2 GB module price rose 5 percent, TrendForce reported.

DRAM manufacturers are taking a firm stand in price negotiations because they suffered losses last year. Buyers do not want DRAM makers to shut down due to losses, so they will ultimately accept higher prices. However, negotiations will be dragged out in hopes of slowing PC DRAM price increases, according to TrendForce.

While PC demand is showing signs of recovery, PC OEMs indicate that April shipments have not met expectations. Businesses and consumers may be delaying computer purchases to later in the year. PC sales may not pick up noticeably until the Ivy Bridge processor is released by Intel later in the year, noted TrendForce.

TrendForce also expects that as suppliers continue to avoid steep discounts, DRAM price quotes will continue to rise until later in the year.

Meanwhile, prices for NAND flash memory are declining. Average prices fell between 4 and 8 percent in the first half of April, according to TrendForce.

NAND flash memory manufacturers said order visibility is low, as flash memory buyers are being conservative placing orders to reduce their own inventory levels. As a result, suppliers are reducing prices to try to stimulate buying.

However, the price discounts are eroding profit margins for suppliers, and will lean towards maintaining stable prices in future contracts, according to TrendForce.