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Expect Weaker DRAM Prices

Contract prices for dynamic random access memory (DRAM) declined in the first half of June because of weaker demand overall, according to researcher DRAMeXchange.

The average contract price for a 2 gigabyte (GB) DDR3 DRAM module fell 2.67 percent to $18.25 in the first half of June compared to May, while the average price for 4GB device fell 2.7 percent to $35.50, reported DRAMeXchange.

Further price declines are likely in the first half of the year, but it is unclear what the long- term price trend will be for DRAM.

Some analysts predict that the growing popularity of media tablets and smart phones could impact the DRAM industry and DRAM prices. Some computer buyers are opting to buy tablets and smart phones rather than new PCs. Media tablets are expected to grow by 200 percent this year, while smart phone growth will be about 80 percent compared to last year, according to DRAMeXchange. However, PCs will only grow about 5 percent.

Tablets and smart phones use less DRAM than PCs, so the rate of growth DRAM shipments could slow. For example, average content per tablet is less than 1 GB and smart phones include around 512 MB. PCs average 3.3GB of DRAM.

The rate of growth, for memory content in PCs, may also slow, further weakening DRAM demand. Microsoft's Windows 7 operating system needs only 2 GB of DRAM to operate efficiently, reported DRAMeXchange.

In the past, a new operating system usually meant that PCs would need more memory to operate efficiently, but that is no longer the case, according to DRAMeXchange.