Looking at an uptrend in spot market this week.

Sep. Motherboard shipment show 10% to 15% MoM growth.

The Top four motherboard companies shipped 5.67 million units in September. These tier 1 motherboard companies are forecasting 10% MoM growth in October. Major shipment are to Europe, China, and emerging markets. Although we haven't seen PC shipments catch up to motherboard shipments, the sequential growth rate of motherboards create some hope for a future pick-up in PC demand.

European clone market slowly comes back

Channel check: The European channels are slowly getting back to the market - refilling inventory and/or new model orders are slowly picking up.

Chipsets check: Sources from the chipset company, SiS, said that Oct. and Nov.s' orders are from major System Integration companies in Europe. The major orders are for P4 DDR333 models which focus on the clone market.

Motherboard check - Motherboard companies' orders also coming largely from the European clone market.

After quarter end, no immediately pressure on DRAM prices.

We have passed the calendar quarter-ends and fiscal year-ends of Micron (in August), Infineon (in September). Now most DRAM companies have some reduced pressure for sales revenue and are now trying to seek good figures for the coming quarter. DRAM makers just pushed out a lot of stock to the distributors and module makers who are not able to consume more at the beginning of the month. Therefore, during the early part of the month, quotation prices are always high and allocation are always tight from DRAM makers. One of the reasons is they can tighten up the spot price to negotiate better contract prices and the is that they cannot sell at prices below what they sold down their inventory to loyal distributors and module makers (causing them to lose money after taking inventory). The higher price is always a win-win solution for both parties.

Spot prices looking up this week.

Although marketers are conservative and concerned about downward pressure on prices during the coming month, as long as weekly motherboard shipment momentum continues and PC OEM orders firm up, trading opportunities can exist before mass DDR output comes out at the end of Oct. or Nov. Prices should be traded up this week on the spot market.

Contract prices : expected flat with support from spot prices.

DRAM demand from PC OEMs still remain stronger compared to the clone market. After stocking inventory to distributors and module makers, DRAM makers' DDR inventory remain low and will seek to hold steady contract prices. Although it's an old drama to replayed again and again, it continues to work.