Alleviating aggressive sentiments before continuing to hike up

:: Alleviating aggressive sentiments before continuing to hike up.

Since mid-May chip prices began to spurt, the non-stopping rising prices have overshot market's expectation. The aggressive market sentiments will alleviate by

1. Module prices have not fully caught up with the rapidly soaring chip prices yet. The price gap between module and chip has slowed down the chip prices' hiking.

2. A half year finance report for inventory book value has died away strong inventory building up sentiments from buyer sides.

3. Profit taking psychology has shaking out partial arbitrageurs. Traders are beginning to release some inventory out for cashing in. Daily buy-low and sell-high trading activities are more frequency rather than previous crazy aggregating inventory for price arbitrage.

:: ASP is just moderate up-pick this week.

Although cash in trading activity has been setting off, which will moderate price uptick, the average selling prices are still expecting on slightly uptrend this week. Even timing is approaching to end of June, also quarter end and a half year end; marketers are not expecting the heavy dumping pressure from DRAM makers. However, some marketers may try to pull down spot prices at 2H of month to get a better entry prices for the other round of price hiking.

:: Inventory moved down from makers to mid-channels.

Prices kicked up, inventory moved down from makers to module makers, traders and distributors. Average inventory level in most DRAM maker sides have been reduced within 3 weeks. Comparing with early May, most of module makers have increased at least 1 to 2 weeks inventory level. Distributors and traders are increasing around 1 week inventory level.

:: Demand for consumer SDRAM remains weak this month.

On low density SDRAM segment, 4Mb, 16Mb, 64Mb and 128Mb using on consumer electronic products, demand and prices remain in sluggish position this month. However, market situation should turn around from July for this segment.