For almost two years there has been a lot of worry about DRAM spot prices. This post’s graphic plots the lowest weekly spot price per gigabyte for the cheapest DRAM, regardless of density, on a semi-logarithmic scale. (Remember that on a semi-logarithmic scale constant growth appears as a straight line.)
The downward-sloping red line on right side of the chart shows that DRAM prices have been sliding at a 45% annual rate since October 2014. This has a lot of people worried for the health of the industry.
What most fail to remember, though, is that DRAM spot prices hit their lowest point twice in 2011, at $2.40 in August, and then $2.20 in November. Today’s lowest DRAM spot prices have only recently dipped below the $2.52 point hit in October of 2014.
The black dotted line in the chart is intended to focus readers’ attention on DRAM costs, which decrease at a 30% average Continue reading
Today’s low spot price of $4.30/GB puts us on a par with February 2013, a full two years ago (see chart). DRAM makers have done a lot to reduce their production costs since that time, so their margins this quarter will be much better than they were in the first quarter of 2013.
But we are still a very long way from the bottom of the last market downturn. In late 2012 spot prices reached a low of $2.52/GB, a full 41% lower than today’s lowest spot prices.
The Memory Guy models the production costs of leading memory chips, and DRAM manufacturing costs have been decreasing for the past several years at an average annual rate of about 30%. That means that costs today are about half of what they were two years ago, and one third of their level this time in 2012.
So even though today’s Continue reading
What is going on, and how is it likely to play out? The prices in the chart represent the lowest spot market prices reported by market tracker InSpectrum for the past year. These prices typically remain below contract prices as long as there is an oversupply, and stay above contract prices during a shortage.
According to InSpectrum’s figures, today’s lowest spot market DRAM prices are about double Continue reading