Quick Take: Q1 DRAM Price Follow-up, 8GB DDR3 Below Target

In September 2009 we predicted that average 8GB DIMM prices (DDR2 and DDR3) would reach $565/stick by year end (with DDR3 being higher than DDR2) and at now we're seeing the reversal of fortunes for DDR2. At year end, the average price for benchmark DDR2/DDR3 was $591 retail, with promotional pricing pushing that below$550 as predicted. Today, we're seeing DDR3 begin to overtake DDR2 in the 8GB ECC category, dropping below $510/stick, while DDR2 climbs to $550/stick (promotional, on $625/stick retail.)

In 4GB ECC configurations, DDR2 enjoys only a slight retail advantage (13%) while promotional pricing (likely due to inventory reduction initiatives) are providing a bit better value short term. However, the price gap is only 1/2 the power gap, with DDR3 delivering a greater than 35% reduction in power over its DDR2 equivalent (about $1.25/year/stick at $0.10/kWh). The honeymoon is almost over for DDR2.

Benchmark Server (Spot) Memory Pricing - Dual Rank DDR2 Only
DDR2 Reg. ECC Series (1.8V)	Price Jun '09	Price Sep '09	Price Dec '09	Price Mar '10
KVR800D2D4P6/4G 4GB 800MHz DDR2 ECC Reg with Parity CL6 DIMM Dual Rank, x4 (5.400W operating)	$100.00	$117.00 up 17%	$140.70 up 23% promo	$128.90 ($151 retail)
KVR667D2D4P5/4G 4GB 667MHz DDR2 ECC Reg with Parity CL5 DIMM Dual Rank, x4 (5.940W operating)	$80.00	$103.00 up 29%	$97.99 down 5%	$128.74 ($149 retail)
KVR667D2D4P5/8G 8GB 667MHz DDR2 ECC Reg with Parity CL5 DIMM Dual Rank, x4 (7.236W operating)	$396.00	$433.00	$433.00 (promo)	$550.00 (Promo price, retail $625)

Benchmark Server (Spot) Memory Pricing - Dual Rank DDR3 Only
DDR3 Reg. ECC Series (1.5V)	Price Jun '09	Price Sep '09	Price Dec '09	Price Mar '10
KVR1333D3D4R9S/4G 4GB 1333MHz DDR3 ECC Reg w/Parity CL9 DIMM Dual Rank, x4 w/Therm Sen (3.960W operating)	$138.00	$151.00 up 10%	$135.99 down 10%	$150.74 ($170 retail)
KVR1066D3D4R7S/4G 4GB 1066MHz DDR3 ECC Reg w/Parity CL7 DIMM Dual Rank, x4 w/Therm Sen (5.085W operating)	$132.00	$151.00 up 15%	$137.59 down 9% (promo)	$150.74 ($170 retail)
KVR1066D3D4R7S/8G 8GB 1066MHz DDR3 ECC Reg w/Parity CL7 DIMM Dual Rank, x4 w/Therm Sen (4.110W operating)	$1035.00	$917.00 down 11.5%	$667.00 down 28%	$506.59 (retail $584, avail. 3/15)
KVR1333D3D4R9S/8GHA 8GB 1333MHz DDR3 ECC Reg CL9 DIMM 2R x4 w/TS Server Hynix A (4.635W operating)				$584.00

SOLORI's Take: With strong DDR3 demand and short-falls in DDR2 supply (according to DRAMeXchange), the only thing keeping DDR3 prices above DDR2 at this point is demand and inventory. As Q2/2010 introduces a rush of new workstation and server products based on DDR3 systems, the DRAM production ramp will eventually stabilize demand somewhere towards the end of Q3/2010. Meanwhile, technology companies like VMware, Microsoft, Intel and AMD are betting on new infrastructure spending on operating systems, virtualization and hardware refresh to drive-up economic market factors. If the global economic crisis deepens, this anticipated spending spree could be short-lived and its impact shallow.