Prices of the most widely produced computer-memory chips rose for the first time since the beginning of November as personal computer makers restocked components after filling year-end shopping season orders.
The price of a 256mb double data rate, 266mHz dynamic random-access memory chip rose 0.6 percent yesterday to US$6.36, according to Taiwan-based online semiconductor trading site dramexchange.com.
The spot price will vary between US$6.20 and US$6.50 this week, the Web site forecast. Prior to the gain, the benchmark chip price fell every day since Nov. 4.
"The rush of short-term demand is coming from the US and European markets for DDR and low inventory in the channel is holding DDR prices up," the exchange said in its weekly market report. "This should be a short-term phenomenon that will most likely end this week or early next week, after which prices should trend downward."
Chip prices normally peak at the end of the third and fourth quarters as personal-computer makers place orders in preparation for their peak sales season, which comes during the end-of-year holidays. Chip prices usually fall at the beginning of the year.
This year, the price of DDR chips, which accept data at twice the rate of convention-synchronous DRAM, rose in October because manufacturers were slow to shift production to the newer chips, which began to find their way into more and more PCs.
They began to fall in November as orders from PC makers slowed and producers such as Hynix Semiconductor Inc and Micron Technology Inc increased output, reducing shortages.
Some analysts expect prices to resume falling because there isn't enough demand for memory chips to support higher prices.
"It's a mixture of increased supply and weaker demand," said Sean Choi, a chip analyst at Samsung Securities in Seoul, who expects prices to fall until the second quarter of next year.
DRAM chips provide the main memory in personal computers, workstations and servers, where they act as temporary storage for data. The DRAM market last year shrank by 62 percent to US$11.9 billion, according to industry researcher Gartner Dataquest.
The majority of the chips, which are produced in the millions per month, are sold through long-term contracts, which companies typically don't disclose.
Some 389 million 128mb equivalent chips were produced in November. About 63.2 percent of the DRAM industry's output was of DDR chips, with 256mb being the most common capacity chip.
The capacity of a memory chip is measured in megabits and the speed at which it can receive data in megahertz.
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