SAN FRANCISCO—DRAM pricing is set to increase as inventory levels fall relative to demand, according to a
new report from market research firm IHS iSuppli. IHS's weeks of inventory DRAM index, which provides a snapshot of DRAM inventory levels, dropped to 11.6 weeks in the first quarter of 2012, down from 12.1 weeks in the fourth quarter of 2011, according to IHS. It marked the second consecutive quarter of improvement since the index peaked at 12.9 percent in the third quarter of 2011, IHS said.
Despite the improvement, the first quarter DRAM inventory index remained higher than it did in the first quarter of 2011, when it stood at 9 weeks, and remains above the long-term average of 9.5 weeks IHS said.
Clifford Leimbach, analyst for memory demand forecasting at IHS, said through a statement that the latest drop in the inventory index was due primarily to an aggressive stockpile burn-off from Japanese supplier Elpida Memory Inc., which declared bankruptcy in February. Elpida is
set to be acquired by Micron Technology Inc. "The action taken by Elpida—and the resulting drop in overall inventory levels for the industry in the first quarter—is a one-time event unlikely to be repeated," Leimbach said. "Even so, the reduction in stockpiles in early 2012 means that pricing should continue to strengthen in the second half of the year."
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