DRAM Market sentiment turning optimistic

:: Speculation to push upturn in early June

As the second half of the year approaches and DRAM makers look beyond SARS, optimism reigns. Positive second-half forecasts and new quarterly-based volume commitments from PC OEMs encourage this optimism. Without pressure to dump inventory early in the month, prices look set to rise this week.

:: 400MHz, 333MHz and 266MHz

Demand for 400MHz and 333MHz DRAM is carrying over and expected to increase in the second half. With strong demand and limited downside risk, prices have room to go up. The clone market has stopped looking for 266MHz DRAM and traders are not expected to keep long-term inventory. However, 266MHz is expected to remain dominant in volume and, as 400MHz and 333MHz prices rise, its price should remain stable.

:: Asian and US activity begins, Europe remains slow

In Asia and the US, expectations are high that demand delayed by SARS is ready to kick in. Traders and the channel are anxious to replenish and pre-stock inventory for arbitrage. Although end-user demand is only just starting to pick up, it's enough to support price rises. Europe, in contrast, is getting ready for its vacation season and the market is sluggish.

:: Graphics DRAM heating up

Demand for graphics DRAM is being helped by the fierce competition between ATI and Nvidia. With DRAM prices apparently bottoming out, speculative demand and pre-stocking are on the rise. High-speed DDR 16Mx16, used in both notebook SO-DIMMs and graphics cards, is now facing short supply.