October 30, 2006 – Struggles with consistent high-volume yields of 90nm processes at one DRAM maker has further constricted a supply shortage on the contract market that may extend into November, according to online clearing house DRAMeXchange.

DRAM demand from PC makers has been robust recently, due in part to preparations for the rollout of Microsoft’s new Vista operating system — initial requirements suggest 1GB of DRAM will be required, but word from beta users suggested up to 2GB of memory would provide noticeable system performance improvements.

On top of rising demand, Inotera Memories reportedly is facing some bottlenecks during its migration to 90nm process technologies, due in part to its reliance on “trench” DRAM technology, according to the Taiwan Economic News.

DDRII contract prices rose 2% to 4.5% at the beginning of October, and 2%-3% recently because of the supply shortage, and prices are expected to increase as much as 5% through the month — first-tier suppliers currently sell 512Mb DDRII modules for $47-$48, with second-tier suppliers getting more than $50 per module. However, some OEM PC makers plan to reduce DRAM modules due to the price hikes, which should prevent prices from getting any higher, according to the report.

Spot market prices of DDRII chips fell 1.5 percentage points during the past week, according to DRAMeXchange — a 667Mhz DDRII chip now costs about $6.40, while a tested DDRII chip is about $5.50.