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Price Drop To Hit DRAM Vendors In 2011

An unforeseen drop in the price of memory chips is expected to hit DRAM sellers this year as supply continues to outstrip demand, research firm IHS iSuppli has predicted.

A study released by IHS iSuppli has predicted that the drop in prices will result in an 11.8 per cent decline in revenue from DRAM sales in 2011.

The company said that the DRAM industry is expected to make around $35.5 billion this year, a significant drop from the $40.3 billion made in 2010. Last year, the industry saw an increase of 77.5 per cent in sales when compared to 2009.

According to PC World, IHS iSuppli analyst Mike Howard expects that the price slump, which started in the third quarter of 2010, will continue throughout 2011.

“After the boom year of 2010, the DRAM market is waking up to 2011 with a hangover. With supply exceeding demand, pricing will decline precipitously for the year, causing revenue to decrease,” he said in a statement.