Shortages and a memory segment price hike are expected to force average global pricing for commodity electronic components up 2.3% in Q3 as compared to Q2, according to iSuppli Corp.

The market research company reported this morning that following declines of 8.4% in Q4 2008, 9.2% in Q1, and 5% in Q2, overall prices are expected to undergo a short-term rise in Q3.

To be true, iSuppli noted that most components are expected to continue their downward pricing trends in the September quarter, but the average is being skewed by DRAM. Furthermore, iSuppli said prices will revert to declines in Q4, with a moderate 0.2% decrease. A 3.1% decline in Q1 2010 and a 1.5% decline in Q2 2010 is expected to follow 2009.

“Overall component pricing is being heavily impacted by price hikes for DRAM, spurred by a shortage of DDR3 parts,” said Eric Pratt, iSuppli's VP of pricing and competitive analysis, in a statement. “Overall DRAM pricing is expected to rise by 10.2% in the third quarter.”

ISuppli is not alone in reporting an upward pricing trend for DRAM. Indeed, the DRAMeXchange this morning reported that Q2 DRAM revenue increased 27.1% sequentially to more than $4 billion on a 23% growth in contract price and a 27% growth in spot price. DRAMeXchange noted that despite slowdowns in production by DRAM makers, PC system vendors continue to replenish their DRAM inventory.

With DRAM accounting for 9.1% of global semiconductor revenue in 2008, iSuppli said the price increase in this area is having an inordinate impact on overall component costs.

Other areas seeing price increases include analog ICs, discretes, and filters, according to iSuppli.

Q3 breakout

According to iSuppli’s Procurement Pricing Index (PPI), pricing will decrease moderately during Q3 for most major memory segments. NAND-type flash will experience a 0.3% decline; NOR pricing will decrease by 1.1%; and EEPROMs pricing will remain flat, the company reported.

Declines also are expected for standard logic ICs, crystals, oscillators, connectors, resistors, and magnetics, and an overall decline is expected for capacitors.

Despite these decreases, the overall rise in the PPI indicates pricing conditions are changing for commodity components, iSuppli said.

“ISuppli previously expected price decreases would be of a greater magnitude in the third quarter as commodity component suppliers cut tags to capitalize on rising demand,” Pratt said. “However, semiconductor suppliers have scaled back their capacity significantly during the downturn. This means supplies are somewhat tighter than expected, preventing prices from declining as much as expected.”