Analysts warn of DRam price hikes

The average megabyte DRam selling price dropped by 17 per cent in the first quarter

DRam prices are set to rise over the coming months, according to new research.

An upswing in the global DRam market has prompted iSuppli to upgrade its rating of near-term conditions for DRam suppliers from 'negative' to 'neutral'.

The research firm said that the 'neutral' rating comes with a "positive bias " regarding future conditions for the market, given indications that the "worst is over" for DRam suppliers.

However, this means that consumers are likely to have to pay more. ISuppli noted that the supply/demand balance is coming into "better alignment" which will bolster prices.

Per-megabyte DRam prices will rise by two per cent during the second quarter of this year, according to the figures.

DRam market conditions have been characterised by oversupply, bloated inventories and weak pricing since the beginning of 2007.

The average megabyte DRam selling price dropped by 17 per cent in the first quarter, following a 31 per cent decline in the fourth quarter of 2007, according to iSuppli.

"Although DRam suppliers are still carrying more inventory than normal, stockpiles in the channel have been reduced significantly," said Nam Hyung Kim, chief analyst at iSuppli.

"Furthermore, OEMs including PC makers are now at optimal DRam inventory levels, meaning that orders will increase during the critical third-quarter holiday build season."