But for now chip production has been cut back, with fabs recording lower utilization rates as demand for semiconductors is much weaker, Erensen said. This reduced supply could lead to significant price increases for memory products in the second half of 2009.

DRAM (dynamic RAM) is an especially price-sensitive space and could see a price rise later this year as semiconductor manufacturers cut down supply, Erensen said. Prices may start coming down when demand increases for PCs and cell phones around 2010 and manufacturers build out capacity to meet the demand.