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Poor PC sales cause three month DRAM overflow

Last night I spoke with an industry source in Taipei who informed me that the DRAM inventory situation is growing worse. Many of the manufacturers have pulled back on DRAM production, but they are still caught with a three month surplus.

The problem has occurred due to flagging PC sales worldwide, subsequently causing DRAM demand to drop. Industry sources are hoping that Windows 8 driven PC sales will drive forward sales in all areas.

Other sources have indicated that DRAM inventory in some PC OEM factories has piled up to a 6 month surplus.

Analysts have already filed reports that PC end market demand has been weak, even during Q3 which is normally a peak period for sales. Companies are now unwilling to buy any additional DRAM stocks as they have enough at hand to last them for the rest of the year.

This will have a knock on effect of dropping DRAM prices to the end user, some claiming that prices by October may be 10-15% lower than they are today.

Elpida and Rexchip Electronics have said that their production has been cut by 25-30% to try and stop prices falling even further.

Kitguru says: It may be a good situation for the consumer in the market for memory, but on an industry level it is causing serious repercussions.

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