Vista and DRAM falling prices raises DRAM usage

The falling prices of DRAM chips and the released of Vista operating system which requires a minimum of 512MB of system memory for Home Basic and 1GB for premium versions have increased the market demand for DRAM.

Semiconductor Industry Association (SIA) President George Scalise said that “Average selling prices (ASPs) for DRAMs continued to be under competitive pressure, declining by nearly 14% sequentially. Total DRAM sales fell 8% even as unit shipments increased by 7%.”

Kevin Kilback, senior marketing manager at Micron Technology told computerworld that unlike pass operating system, the latest Microsoft operating system, Vista, really takes advantage of more memory, thus, driving up memory usages.

According to Micron, the average DRAM content of a PC has increased to 53 percent from 772 MB last year to 1,180 MB this year. By next year, the amount of DRAM going into PCs is expected to be about 1.5GB. “That’s basically driven by Vista,” Kilback added.

Vista migration rate is also expected to pick up in 2008. Once the roll-over to Vista is at pick, the demand for DRAM chip will increase much further.

While it is true that some memory chipmakers are selling their chips below the cost production due to competitive pressure and over forecasted Vista demand, analysts expect some DRAM makers will be able to swing back to profitability later this year due to increasing demand.

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