System memory spot prices are on the rise

— 1:31 PM on June 20, 2007

We've heard from various sources that system memory prices would start to go up in the second half of this year, and that trend appears to already be in effect. As DRAMeXchange reports, spot prices for 512Mb (64MB) DDR2 memory chips jumped by 22.8% to 27.5% (depending on the memory type) between June 11 and June 20. One of the factors behind this increase is a little unusual, though:

Some channel distributors in Shenzhen, who aggressively pre stock amid the smuggling-fighting measures in southern China, is one of the major causes for the price rebound. Since China imposes 17% VAT on imported goods, some China-based channel distributors often smuggle DRAM chips from Hong Kong in order to avoid the VAT cost. Yet, the strict smuggling-fighting measures recently prompted them to aggressively source DRAM chips from spot market under shortage concern, thus boosting prices accordingly.
The other factor behind the increase, according to DRAMeXchange, is longer production cycles caused by the transition to 70nm process technology. (Thanks to The Inquirer for the tip.)
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