As most PC OEMs have already piled up sufficient DRAM stock to meet end-of-year demand and most are confident of supply availability in 2008, the recent stock clearance activities among vendors will thus have the effect of prolonging the weak pricing environment at the DRAM contract market. Some industry watchers even project that prices will have no chance of a rebound before 2008.

Latest DRAM contract prices revealed by DRAMeXchange showed that the downward price trend persists, though the drop in magnitude has weakened on a sequential basis. The memory-trading firm attributed the trend to peaking shipments in October, implying that there is little chance of a rebound in the near term.

Sources from Taiwan-based DRAM makers concurred, saying that, by October, most customers should have piled up enough stock to meet demand up to the end of the year. Additionally, seasonal weakness in the first quarter means that customers that continue to procure more stock, expose themselves to increasingly severe price pressure, and consequently consumption has been muted recently, they said.

Although PC OEMs are cautious about their inventory, they are still trying to trim inventory levels to lower possible risks, the sources said, despite that many are hoping that the expected launch of Windows Vista SP1 during first quarter 2008 will promote a boost in consumption.

DRAM makers commented that PC OEMs are even rejecting prices for 1GB DDR2 DIMMs as low as US$20, as the pricing is not attractive for them at all.