DRAM prices spike after Qimonda bankruptcy

02.02.2009
DRAM chip prices spiked last week over supply concerns after chip maker Qimonda filed for bankruptcy protection in Germany, and prices will likely continue to climb, Gartner said Monday.

The price of the most popular 1Gb (gigabit) chip rose as much as 16 percent compared to a week earlier, the market researcher said in its Semiconductor DQ Monday Report. DRAM prices across all capacities increased 8.7 percent on average compared to a week earlier.

Prices will likely move higher this week, warned Gartner analyst Andrew Norwood.

"The full effect of [the Qimonda] news will not be felt until the brokers and traders in Asia respond to the news," he wrote in the report.

The biggest spot market for DRAM is in China, where the bulk of the world's desktops and laptops are assembled. But last week was a public holiday for China and much of the rest of Asia, where people celebrate the Lunar New Year. When traders in the region return to work on Monday, they may send prices higher.

DRAM chips are produced in such volume that a spot market exists for them, where traders buy and sell them like commodities such as oil and gold. Similar to how a disrupted pipeline or fighting in a sensitive area may cause oil prices to rise, major shocks to the DRAM market, like Qimonda's bankruptcy filing, can cause DRAM prices to spike. Around three-fourths of all DRAM go into PCs.