DRAM Manufacturers Ramp Up Production

Manufacturers have reacted almost immediately and there are reports that vendors are increasing their production volume again. Tier 1 manufacturers cut their production volume in Q4 to halt a dramatic price decline.

According to Digitimes, DRAM producers have added 100,000 wafers to their output in Q1 to move towards a balance of supply and demand. Forecasts indicate that DRAM demand may rise by 30 percent in the current quarter. Digitimes said that average selling prices for 4 GB DDR3 DRAM modules have increased by about 6 percent to $18 since Q4. 2 GB DDR3 DRAM also showed higher selling prices than in the last quarter.

Elpida remains a uncertain variable in the DRAM market, which could make a major impact on near-term DRAM pricing. The company recently stated that it was not able to renegotiate its debt, which caused speculation that the company may now be forced to merge with Micron. Elpida still has until March 22 to come up with a solution to address a pile of $4 billion in debt.

Analysts such as Raymond James’s Hans Mosesmann predict that a Elpida will have a "significantly diminished" capacity to produce DRAM, which could push the prices of the memory higher.

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