Prices of the most widely produced computer-memory chips fell as Micron Technology Inc, Hynix Semiconductor Inc and other makers raised production at the same time that orders from personal-computer makers slowed.
The spot price of the 256mb, 266mHz double-data-rate dynamic-random-access-memory chip, fell 0.2 percent on Thursday to US$6.19, bringing its losses in the last seven days to 4 percent, according to Taiwan-based online semiconductor trading site dramexchange.com.
"Inventories moving down from DRAM makers to distributors and traders are pulling down DDR prices," the exchange said in its weekly market outlook. Dramexchange forecast the chip price will trade between US$6.35 and US$6.00 in the next week.
Chip prices normally peak at the end of the third and fourth quarters as PC makers place orders in preparation for their biggest sales season, which comes during the end-of-year holidays.
Chip prices usually fall at the beginning of the year.
Companies such as Micron Technology, the world's No. 2 computer memory-chip maker, are trying to shift production from older synchronous dynamic-random-access-memory chips to DDR chips, which accept and send data at twice the speed.
The shift comes as PC makers, trying to persuade consumers to trade up to newer models, demand improvements in the performance of components.
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.
Dramexchange forecasts 256mb DDR contract chip prices will be unchanged at between US$7.25 and US$6.50 in the coming week.
One consequence of the move to new chips has been a rally in the price of older technology as supply shrinks. The price of the 256mb, 133mHz synchronous DRAM chip price rose 0.8 percent to US$3.63 Thursday, leaving it up 66 percent from its annual low on Sept. 26.
Previous to the recent rally, synchronous DRAM chips traded at below the price of production for most of 2002 because of oversupply.
SDRAM prices will probably rise further, aided by demand and speculation, the exchange said. "Prices will rise due to major conversion into DDR and decreasing SDRAM supply." The exchange predicted an increase in demand from Asian markets ahead of the Lunar New Year holiday in early February.
SDRAM chips are still widely used in lower priced, lower performance machines popular in China and other emerging personal- computer markets
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