Memory-Chip Prices to Fall

  JANUARY 12, 2011   

By NATHAN BECKER

World-wide revenue from dynamic random-access memory is expected to contract sharply this year, according to an industry researcher, as a "huge" drop in prices is expected.

Revenue from DRAM, the main memory used in videogame consoles and desktop and laptop PCs, is expected to fall 12% from last year's total to $35.5 billion, according to IHS iSuppli. That is a stark reversal from the 78% increase in DRAM revenue for 2010. The firm expects prices to drop 45% this year from year-earlier levels.

"After the boom year of 2010, the DRAM market is waking up to 2011 with a hangover," said Mike Howard, senior analyst for DRAM and memory at IHS iSuppli. "With supply exceeding demand, pricing will decline precipitously for the year, causing revenue to decrease."

The next several years for the market, iSuppli said, are expected to be "turbulent" as revenue "heads down in the face of ever-declining" prices.

Although the price declines are bad news for suppliers, they are positive for consumers, as computers are likely to come preloaded with more memory.

Write to Nathan Becker at nathan.becker@dowjones.com