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Anticipation on prices spiraling up

PC shipments to show improvement in Sep.

Motherboards - August MB shipments of Taiwanese top 4 motherboard companies show approximate 5.10 million units, or 9% M/M growth; anticipating additional 5 - 7% M/M growth in September.

Notebook shipments should also improve in September. The market forecasts that notebook shipments will reach approximately 1.2 million units in September after the 1 million units shipped in August. (note: worldwide average PC shipments /month (including notebook) is approximately 10~12 million.)

Overall, the growth rate is not great for the PC industry as a whole, but as long as we are seeing growth in PCs, we will be consuming more DRAM.

The European market finally comes back!

After a long summer vacation, the European market finally showed some positive signs of coming back to the DRAM market from this week. European traders and other channel players are slowly coming back to the market to look for DDR modules. SDRAM modules are very slow moving there - no request/demand picking-up for SDRAM seen in Europe yet.

Contract prices looking like it will trend up

With similar reasons as we mentioned on August 21th "The Battle of contract price" (https//www.dramexchange.com/forum/fourm_main.asp?row=611), although DDR output already ramped up from 117.98 million 128Mb Equivalent units in July (35.45% of July worldwide output share) to 155.96 million units in August (45.52% of August worldwide share). With difficulties persisting in migration to 0.13/0.14um processes, DRAM makers are still trying to raise the contract prices in 1H September (range of $55 to $58 for 256MB DDR).

Spot prices to follow

Spot prices are trying to keep up with contract prices (still lower than contract price levels). Some traders' inventory cost basis is higher than the current spot price level, therefore they would prefer to wait for the price to trade higher before they sell out. The anticipation of prices rising keeps transaction volumes relatively low in early September. The sellers are looking for higher prices, while the buyers, of course, are still not sure "if prices will trend up firmly and for how long and how high...?", but for sure, the short-term rebound is already moving along in the postive direction.