May 14, 2010
NAND Pricing Remaining Profitable
Data being released on the memory industry is showing an increased demand for DRAM. A report from iSuppli has shown that several DRAM components are now on allocation. As well, DRAM sales overtook the entire first half of 2009 within the first quarter of this year.
Pricing for DRAM shot up in this first quarter from the fourth of 2009. As well, prices for NAND have been falling at the same time.
For DRAM, revenue worldwide approached $9.5b in the first quarter this year, a 9.7% increase from $8.7b earned in 2009's fourth quarter. It is also a 181% increase from $3.4b earned revenue in 2009's first quarter.
A senior analyst for DRAM at iSuppli, Mike Howard, said in a statement, "Both DRAM shipments and average selling prices (ASPs) surged in the first quarter due to stronger-than-anticipated demand for PCs and tight supplies. It doesn't take a math genius to figure out that the combination of larger shipments and higher prices results in rising revenue for the DRAM market. This strong performance bodes well for continued growth in 2010, possibly paving the way for the industry's greatest year in history."
Others in the industry have noted a recent small decline in spot pricing from last week. They say even though demand has not been as strong as it could be, distributors have been liquidating inventory purchased at a lower cost. The average spot pricing for all densities went down 1.5% this past week when compared to the previous week, at $2.81 on a 1GB equivalent basis.
Things are a little different for NAND, with higher demand but also sliding spot prices. Buyers have stayed careful about purchasing large volumes, considering the instability found in the pricing outlook.
Most device types experienced a little bit of price erosion lately. However, current pricing levels are still considerably higher than previous lows. With a weighted 1GB average, the current spot prices are $1.57, showing sizable erosion from one year ago. In May of 2009 the prices were at $2.36.
But at the same time, it is still not down from the record low in December of 2008, when the pricing ended up at a punishing $0.90 cents for a weighted 1GB average. Almost two years later, it has yet to reach those same unprofitable levels. This demonstrates how unfortunate the pricing situation for NAND vendors used to be, and how we have come into an era that is once again profitable.
Pricing for DRAM shot up in this first quarter from the fourth of 2009. As well, prices for NAND have been falling at the same time.
For DRAM, revenue worldwide approached $9.5b in the first quarter this year, a 9.7% increase from $8.7b earned in 2009's fourth quarter. It is also a 181% increase from $3.4b earned revenue in 2009's first quarter.
A senior analyst for DRAM at iSuppli, Mike Howard, said in a statement, "Both DRAM shipments and average selling prices (ASPs) surged in the first quarter due to stronger-than-anticipated demand for PCs and tight supplies. It doesn't take a math genius to figure out that the combination of larger shipments and higher prices results in rising revenue for the DRAM market. This strong performance bodes well for continued growth in 2010, possibly paving the way for the industry's greatest year in history."
Others in the industry have noted a recent small decline in spot pricing from last week. They say even though demand has not been as strong as it could be, distributors have been liquidating inventory purchased at a lower cost. The average spot pricing for all densities went down 1.5% this past week when compared to the previous week, at $2.81 on a 1GB equivalent basis.
Things are a little different for NAND, with higher demand but also sliding spot prices. Buyers have stayed careful about purchasing large volumes, considering the instability found in the pricing outlook.
Most device types experienced a little bit of price erosion lately. However, current pricing levels are still considerably higher than previous lows. With a weighted 1GB average, the current spot prices are $1.57, showing sizable erosion from one year ago. In May of 2009 the prices were at $2.36.
But at the same time, it is still not down from the record low in December of 2008, when the pricing ended up at a punishing $0.90 cents for a weighted 1GB average. Almost two years later, it has yet to reach those same unprofitable levels. This demonstrates how unfortunate the pricing situation for NAND vendors used to be, and how we have come into an era that is once again profitable.
