Still looking optimistic for this week.

Contract prices will rise between 5% and 10%

Contract prices for the the first half of Nov. are under negotiations; the official quote prices are between $63 and $65 for 256MB DDR module. We also verified that the deal prices are $60 for some big PC OEM customers. At the beginning of month, we actually heard some contract quotation prices were as high as $70 for 256MB DDR module, but were rejected (too high). Marketers' view of acceptable contract prices for 1H will probably fall into the $60 to $65 range. SDRAM contract prices should remain stable for 256Mb and could rise a little bit to $2 for 128Mb.

Street prices.

Spot market prices for DDR are already selling for $70 to $75 for 256MB DDR module. The prices in Asian and US markets are relative lower than the European market. Demand from the end-consumers are just OK, meaning not really strong. But demand from traders to speculate and for the channel to refill inventory levels are comparatively strong.

Inventory checking,

DRAM makers' inventories in DDR are very low and continue to try to reduce SDRAM inventory levels. At the beginning of the month, DRAM makers do not have any inventory for DDR and most of DDR outputs have already been booked by PC OEM customers. The portion left to allocate to the spot market is very low. SDRAM remains the major portion of their inventory (and they continue to try to reduce their levels).

Module makers - Overall inventory is within one month - includes both SDRAM and DDR. The DDR portion is relative low; and averaging lower than 1.5 weeks.

Distributors, channels and traders - hold lower than one weeks worth of DDR. Most traders have no SDRAM inventory, especially small traders. Some big distributors hold some SDRAM.

Perspectives

DRAM makers - Most DRAM makers are positive on Nov's prices. Even for the second half contract prices, they believe they can still keep rising. Spot prices might have some volatility but overall it should trend up in the short-term.

Module makers - For most module makers, they are getting more cautious about purchasing at current high prices, so are just keeping thier buying volume to a minimum. They are not sure how long prices will keep rising. They would prefer to lock in a certain gain rather than risk losing too much for gambling on price trends.

Distributors, Channels and traders - As long as prices keep trending up, they have no reason to not trade for profit; anyway their inventory are competitively low and the market situation this week remains optimisitc.