If you've shopped for DDR2 memory recently, you've no doubt noticed just how inexpensive the memory has become, with 2GB DDR2-800 kits often selling for less than $30 after rebate. As you can imagine, this has had a huge impact on revenues for memory manufacturers:

According to DRAMeXchange, DRAM contract prices for the first half of April so far have not increased. Contract prices for 1GB DDR2 modules ranged from US$16.50 to US$18.50, with an average price of US$17.50. The memory trading firm said most DRAM vendors are firm on pricing even though customers continue to cut their target price. Given that no supplier has cut production despite prices already being below variable cost, a firm pricing is their last resort. Despite DRAM buyers installing more DRAM in PCs, it is merely a promotional tool as most PCs already have more than enough DRAM to support Windows Vista, DRAMeXchange said. DRAM buyers now have less incentives to cut DRAM prices even though they could since maintaining good relationships with vendors in the future is also an issue that needs to be taken into consideration.