2011 was a bloodbath for the DRAM industry, as overproduction led to sharp drop in prices across the board, killing profit margins, and creating huge losses for DRAM makers. In Q4 2011, Elpida and Nanya cut back their production to prevent further drops in DRAM prices. As prices are now slowly stabilizing, DRAM makers are considering stepping up production cautiously, till "normalcy" in DRAM prices can be achieved.

DRAM makers cumulatively increased production by 100,000 wafers in Q1 2012, according to sources. These companies are walking a tight rope between ensuring they don't dampen demand, while ensuring they don't face further losses. This month, DRAM contact prices have gone up as PC OEMs placed fresh orders to replenish their memory inventories. The prices have reportedly gone up by 6% so far in this month. Meanwhile, the global supply of DRAM is expected to grow by 30% in 2012.