Elpida president confirms DRAM price hikes

Elpida’s president has cemented rumours that the company may rise its DRAM prices.

The company has been threatening changes since January and said at the time it would raise prices by around 10 percent, due to the fact that DRAM prices were going for a third of what they managed last year.
After explaining that the decision was due to rising demand for the chips, Yukio Sakamoto gave delegates at a conference an example of what the hikes would cost.

He said OEMs could end up shelling out $2.30 – $2.50 for a 2-gigabyte DRAM chip, compared to the current $2.10. This totals a 19 percent increase.

Previous price drops were a result of the recession, which caused oversupply and led to manufacturers undercutting each other to remain competitive. However, this seems to have changed and businesses are taking advantage.

Two weeks ago, Sakamoto said he expected demand to exceed supply by the second quarter as client inventories dropped and they started placing new orders.

However, Elpida isn’t alone in wanting to raise prices, Back in January, Powerchip also said that it would consider this due to an upturn in the market. With the company thinking along the same profit lines, it’s no wonder Elpida announced earlier this month that it planned to buy the entire DRAM output of Powerchip, which it hoped would bolster its competitiveness and help it focus on higher-end chip production.

Some aren’t too convinced that the DRAM market is doing so well. According to research by iSuppli IHS, the market didn’t fare well last year. It said that this year the industry would continue its “wild and volatile ride”, which could see major player Samsung being knocked from its top spot.