Nanya Technology projects that a DRAM shortage will persist through the first quarter of 2007 and that the price trend of DRAM will remain strong in the second half of 2007, said company spokesperson and vice president of global sales and marketing Pei-lin Pai at a December 6 investors conference.

Pai highlighted that present inventory has been reduced to below 10 days on persistent strong demand. Nanya saw its inventory was within an average of two weeks in the third quarter. Some customers were even willing to pay as much as US$60-70 for 512MB DDR2 DIMMs. According to the latest contract prices, 512MB DDR2 DIMM in 533MHz and 667MHz configurations were US$49.50 and US$50.60, respectively, in the first half of December.

Strong demand is interrupting the seasonal pattern, Pai said. PC OEMs often slow down their procurement after mid-November but Pai now anticipates that customers will continue to procure through December due to the present shortage. He also noted that some PC OEMs have started inking long-term supply deals with chipmakers in order to secure sufficient stock for next year. For Nanya itself, about half of its output in the first quarter of 2007 has been booked.