Spot prices begin to correct down?

Contract prices.

DRAM makers - Remain the same strong attitude on contract prices. They are likely to rise prices up again (at least remain the same levels). Quotation prices for spot market are still high to support the contract prices.

Contract prices be expected flat or up a little bit at 2H of Nov.

Marketers expect that contract prices can still remain flat or up a little bit because of following reasons.

1. With demand from PC OEM's seasonal strength, contract based forecast orders to DRAM makers are still remain flat or move moderately higher.

2. In order to secure sufficient allocation, PC OEMs pre-confirm orders to DRAM supplier.

3. There are still some prices premium between spot and contract, contract prices are still low than spot prices.

Spot prices' correction is on the way.

Motherboards' shipments were expected to decline

Motherboard shipment begins to show the weakness (Tier 1 motherboard shipments from Taiwanese companies in Oct. were around 6.5 million and be estimated 6 million in Nov.). Marketers expect demand for DRAM will follow motherboard's shipments to decline.

Speculators begin to get out of market

As some speculators and traders expect the seasonal demand for PC shipments and motherboard shipments will begin to decline from 2H of Nov. and DRAM suppliers can increase DDR portions gradually, the trading opportunities for profit gain in spot prices begin to narrow down. They begin to sell out and try to rid of inventory; therefore prices begin to show the weakness. Inventory level are relative low on their sides, therefore it didn't cause a big snowball effect to crash down the market prices. The transaction volumes were low at beginning of this week

Traders begin to look downward on prices

Without the demand from speculators and traders, the real slow moving end-demand can not support the prices spiral up and up again. Although the transaction volumes were low, prices did begin to trade down little by little. There are not many people willing to purchase for stock purpose. Expect the declining demand will erode the prices further.

Spot prices' correction begins from this week.

This week's spot prices will influence the 2H of contract prices' negotiation; therefore DRAM makers probably try to maintain the spot prices at current level or rise higher. On the other hand, spot market players are more sensitive and fast mover when market turns into the other way.