DRAM price to drop even more

The company forecast that prices for DRAM would be on a downward correction this October after a period of strength toward the end of the second quarter - though prices are looking to be on the downward spiral one month earlier than it predicted.

Memory suppliers will be in trouble with the price decline - iSuppli reckons that the drop will set the stage for continued erosion in the fourth quarter.

Isuppli said: "OEMs and the channel are still working off the inventory oversupply left over from January, which will make it a difficult fourth quarter for memory manufacturers."

On top of this, a shortage of LCD panels is stopping PC makers from buying more DRAM - increasing panel prices are also to blame for the slowing DRAM content growth for the third quarter, said the analyst.

It's not all bad news, however. Isuppli reckons that the suppliers' efforts to cut down on production starting for the third quarter will mark a big long-term role in bulking up the DRAM market. It reckons that global annual bit growth for 2008 will be less than 60 per cent - a far cry from the 97 per cent bit growth predicted for 2007 - and help to rebalance supply and demand.