Manufacturers exploit plummeting DRAM prices

A rapid fall in the price of DDR memory has prompted PC and server manufacturers to increase the operating specifications of their systems.

Research firm iSuppli reports that prices for DDR3 memory have plunged over the past six months to reach effective parity with older DDR2 modules.

The price for 2GB DDR3 modules has fallen from $46 (£29) in April 2010 to $21 (£13.50) in December, and DDR2 prices have fallen by more than half.

"DRAM prices in general have been affected by soft PC demand, especially during the first half of 2010, as well as by greater supply of commodity memory following a solid increase in bit shipments during the second half," said Mike Howard, principal analyst for DRAM and memory at iSuppli.

"That lethal combination of falling demand and growing supply has coalesced to place a great deal of pressure on DRAM average selling prices."

As a result, manufacturers increased memory specifications by 25 per cent last year, and this will rise by another 33 per cent this year, the analyst house predicts.

Manufacturers will keep increasing memory installation so long as the cost does not exceed 10 per cent of the purchase price of the finished system, Howard said.