EBNews has posted a short update on the continuing DRAM saga, indicating that yet again, new record price lows have been reached.

DRAM prices have now dropped to about $3 for 128Mbit parts, which, along with 265Mbit parts, constitute the bulk of DRAM sales. A quick glance around the web reveals 128 MB modules retailing for less than $20 on average, while 256 MB modules are around $35, and even dropping below $30 in some cases.

On the spot market, 128Mbit SDRAM was selling for $3 to $3.25, with some Asian commodity quotes below that level, according to Johnson. Sogas suspects that the lowest prices could represent one-time panic sales of off-brand parts, but agreed that prices for SDRAM will continue to plumb new depths.

Even OEM contract prices are in the $3 to $3.50 range for 128Mbit devices, Sogas added.

While at first glance the ultra-low prices may seem like a good thing in that they could help to boost slumping PC sales, there are hidden dangers that can result as well. Particularly, at such low prices, it is not unreasonable to assume that many manufacturers, particularly smaller ones, are operating at a loss. If prices continue to drop further, or even hold at this level for long periods, we could see a mass extinction of smaller DRAM manufacturers, which, overall, would not be a good thing for the industry.

Hopefully prices return to a more realistic level shortly. In the mean time, enjoy the bargain, and grab yourself another 256 MB.

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