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Memory prices rose during second quarter

Tom Krazit Former Staff writer, CNET News
Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
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Tom Krazit

DRAM prices rose during the second quarter as memory chip makers switched production to a newer standard, according to market research released Tuesday by iSuppli.

The memory market is shifting over to DDR2 (double data rate 2) memory, which can hit faster speeds than the DDR memory used over the last few years. Intel has supported DDR2 memory for some time, and AMD is introducing support for the technology this year. As a result, memory companies are starting to make more and more DDR2 chips.

But there are still lots of systems out there that use DDR memory, and demand for those chips coupled with a decline in DDR production during the quarter led to overall price increases of around 4 percent across the entire memory market, iSuppli said.

Ironically, deep price cuts during the quarter from Intel, AMD and chipset vendors on older DDR-supporting technology probably contributed to the demand and higher prices for DDR memory, iSuppli said. DDR2 prices declined during the quarter, however, and as Intel, AMD and the PC companies purge their inventory of older products the demand for DDR chips should start to wane over the next 12 months.

Samsung is still the world's largest DRAM company, trailed by Qimonda and Hynix.The entire market increased by 31.2 perecent compared with last year, as the industry collectively raked in just under $6.6 billion in revenue.