Last week the spot price continued to decline, as retailers and several module houses were still in the process of clearing out their inventory. By the end of July and early August, demand should start to pick up again, as inventory levels stabilize. Between the July16-20 period, the DDR2 eTT chip slid to US$2.05, while the branded DDR2 512Mb 64Mx8 declined to US$2.19.
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According to DRAMeXchange's survey, one of the reasons behind the decreased market demand stemmed from consumers holding off purchases until Intel's upcoming CPU price cuts in 2HJul. In addition, with the DRAM spot price already exceeding the contract price last month, there was little incentive for further price increases. Module houses have instead focused in removing their older product inventory to boost profits. The current pricing levels have generally left retailers and module houses uninterested in increasing their inventory. On a different note, amid the DRAM contract price hike in early July, the DDR2 512Mb chip price has jumped past the $2 level. Trading has slowed, as the market waits to see if more contract price increases may occur, which may in turn stimulate more spot market transactions.
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Amid the rise in the contract price, spot prices rebounded last week. Despite the price increase, there has been no apparent growth in demand. DDR2 eTT slipped slightly to US$2.21, while the branded DDR2 512Mb 64x8 chips rose to US$2.3.
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Market trading was sluggish last week, as manufacturers began to count their month-end inventory. In the China market, the reduction in the amount of smuggled chips from Hong Kong has caused a decrease in price queries, and a gradual decline in the spot price. The DDR2 eTT chip increased to $2.28, while branded DDR2 512Mb 64Mx8 edged down to $2.26. This shows that the short-term price upticks in the past few weeks have mostly arose from market speculation. The actual market demand does not seem to be strong enough in underpinning prices to increase further.
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The DRAM spot price continued to maintain its upward climb last week. However, after a succession of rapid price increases, the momentum has slowed down. The DDR2eTT chip jumped 9.3% to $2.23, while the DDR2 512Mb 64Mx8 leapt to $2.38, up 7.7%. Increases in the chip price are also driving up branded module prices. Samsung's DDR2 667MHz 1GB module reached to a high of $48. In contrast to a low of $31 last week, this marked a 54%increase.
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DRAMeXchange observes DRAM spot price rebound last week channels' pre stock activities amid smuggle-fighting measures in China, as well as prolonged cycle time on 70nm output.
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DRAM spot market was quite last week as most buyers attended Computex. DRAM spot price was on a mild decline, with DDR2 eTT slipping 8% to US$1.6. Branded 512Mb (64Mbx8) DDR2 price slowly eroded to US$1.8.
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Spot price went up last week on lack of new DRAM chip supply, while contract prices tumbled another 5%. It is projected that after the 2007 Taipei Computex draws to a close, prices will have a chance in experiencing a rebound. Elpida's CSO has suggested his bullish view to 2H07 and he anticipate supply may tighten in 2H07.
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Beginning from Jan07, mainstream DRAM DDR2 chip prices began to spiral downwards. Up until now, although prices have rebounded sometimes, they have occurred only three times, ranging merely between 10%-15%, and lasting for less than 10 days. According to DRAMeXchange's database, the average price of the DDR 2 tumbled 20% QoQ in 1Q07, and in 2Q07, it is expected to decline a whopping 50% QoQ. When the mainstream DDR2 512Mb 667MHz chips slipped below USD 2, it attracted many buyers to take advantage of the inexpensive chips in stocking up on their inventory. Nevertheless, amid the continuing growth in supply and the hot season not arriving yet, the increased chip buying was not sufficient enough in keeping up the DRAM prices. The market outlook of the DRAM industry has started to look gloomier. With prices already below the manufacturing costs, major DRAM makers have expressed an unwillingness to cut their prices further in clearing out their excess inventory. Current market observations show the DDR2 chip price possibly bottoming out. If this occurs, it should drive up the chip demand, and spur a rebound in the spot price.
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For last week, the spot market showed no increase in demand, as prices slipped more than 10%. Hovering between the USD1.35-1.50 level, the DDR2 512Mb (64Mx8) 667MHz eTT plunged to a low of USD1.32. DDR2 512Mb (64Mx8) 667MHz, on the other hand, dipped to a weekly low of USD1.50.By contrast, DDR chips maintained a more gradual price decline, where DDR 256Mb/512MB 400MHz saw a drop of roughly 3.5%. SDRAM prices remained flat, due to stable demand and supply mechanisms.
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