iSuppli expects DRAM prices to rise in Q1 of 2006

Following a dramatic 20 percent decline in the fourth quarter of this year, iSuppli believes that 256 and 512 Mbit DRAM prices will show a moderate increase in the first quarter 2006. However, the DRAM industry will face an overall decline in market pricing for 2006, the market research firm said.

The slight rebound in early 2006 is likely to occur due to slowing bit production growth among DRAM suppliers. DRAM bit production is expected to grow by only about 52 percent in 2006, compared to 62 percent in 2005, iSuppli said. One reason for this trend is the decision of some DRAM manufacturers - such as Samsung and Hynix - to convert fabs from producing DRAM to a more lucrative product - NAND Flash.

The overall pricing outlook for 2006 once again is less positive, iSuppli believes. Sales will decrease 5.1 percent to $23.97 billion, according to the firm. Or 2007, revenues are expected to rebound by 12 percent to $26.8 billion.