SAN FRANCISCO — Contract prices for PC DRAM are on pace to decline by 30% in the first quarter, the steepest decline in a single quarter since 2011, according to DRAMeXchange, a market research firm that tracks memory chip prices.

The firm had originally said that it expected contract prices to decline by about 25% in the first quarter.

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DRAM Prices Forecast to Crash in Q1

DRAM inventory levels have continued to decline since the fourth quarter of last year, with most DRAM suppliers now holding about six weeks worth of inventory, DRAMeXchange said. At the same time, the firm said that a shortage of low-end Intel PC processors is expected to continue until the third quarter, impacting the ability of PC OEMs to burn off DRAM inventory levels as a result.

“The overall market has thus entered freefall, meaning that large reductions in prices aren’t going to be effective in driving sales,” DRAMeXchange said in a statement. “The excessively high inventory will continue to cause down-corrections in prices this year if demand doesn’t make a strong comeback.”

Total DRAM revenue industry-wide declined by 18.3% in the fourth quarter compared to the third quarter, as both prices and bit sales declined, according to DRAMeXchange, which is a division of Taipei-based TrendForce.

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