Elpida Memory is planning to raise prices of its PC DRAM in early March 2011, as demand and supply will be more balanced, according to company president and CEO Yukio Sakamoto speaking at a press conference.

For instance, prices for 2Gb DDR3 chips are set to increase to US$2.30-2.50 from the current US$2.10, Sakamoto said.

Sakamoto reiterated his optimism that DRAM demand will start picking up in March, as PC companies are now more willing to purchase in larger volumes and client inventories continue to fall.

Sakamoto said that supply of DRAM memory is likely to shrink as many chip suppliers allocate more capacity to NAND flash production in order to keep pace with the rising demand coming from the smartphone and tablet PC sectors. An expected reduction in DRAM supply will be able to prop up prices starting March, Sakamoto added.

Meanwhile, supply will also be constrained by upstream chipmakers' cautious attitude towards expansion over the past several years, Sakamoto indicated. Though some of them are undertaking their expansion projects, new capacity will still be limited in the short-term, Sakamoto said.

On the demand side, Sakamoto pointed out that higher DRAM content in PCs for 2011 will help digest the industry's capacity.

Sakamoto made the remarks at an investors conference on February 24 about Elpida's plans to issue TDRs (Taiwan depositary receipt).

Sakamoto previously said that DRAM inventory at PC OEMs had slipped to 0.9 months, and would drop to below 0.8 months after mid-March. DRAM contract prices would start growing with 2Gb DDR3 parts likely to approach US$3 in March.