Chip Prices Dropping

Here are some good news.The global chip market is suffering from falling prices in microprocessors and memory chips.Intel and AMD have been battling each other through price reductions for over a year now, and reports indicate that Intel will cut prices on some microprocessors again in late July. The price war has been good to consumers, delivering more technically advanced microprocessors at a lower cost. Microprocessors are generally the most expensive chip inside a PC.The DRAM market has been hit the worst. The price of mainstream 512M-bit second-generation double data rate (DDR2) DRAM that runs at 667MHz has plunged 72 percent so far this year to $1.79 per chip, according to DRAMeXchange Technology Inc. The market research division of the company has noted that the chips appear to be bottoming out, and that prices could tick up a bit later this month. DRAM price reductions for users normally come a few weeks or a month after the spot DRAM market falls.
NAND Flash memory has suffered a similar fate as DRAM, but not quite as steep a decline. A glut of the chips early in the year has been wiped out by memory makers, which tweaked production lines to make more DRAM instead of NAND flash. Prices of 8GB NAND has fallen 18 percent his year to $9.26, according to DRAMeXchange, while the 4GB capacity has dropped nearly 15 percent to $5.69.
The SIA expects PC and mobile phone sales to rise 10 percent each this year. Mobile phone sales may give chips a bigger boost, however, because users are buying more 3G (third generation communications) handsets, which contain more chips than older phones.