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【Market View】DDR remains bullish in spot market


Published Feb.03 2004,19:05 PM (GMT+8)

Weekly Market Info Update
 
DDR remains bullish in spot market
 
Boosted by limited supply and speculation, DDR have kept upturn momentum since early January and the market momentum even go stronger in past week. 256Mb 32Mx8 DDR400MHz is worth a mention as one of the strongest leader to the upside, with weekly gains of 13.53% and monthly gains of 24.3%. In general, DDR 32Mx8 400/333/266 MHz have been solid performers though January, rising 13.53%, 10.94% and 11.78% respectively from January 27 to early today. SDRAM 16Mx8 / 32Mx8 133MHz are up 7.71% and 2.73%, from $3.89 to $4.19 and $5.87 to $6.03. ( List I )
In spot market, many traders and channel distributors are still in upbeat mood and keep locating more products in. UTT has been traded to the high level around $4.50 today.
 
256Mb 32Mx8  2004/1/27 2004/1/28 2004/1/29 2004/1/30 2004/2/2 2004/2/3 Change 
DDR400 4.14 4.29 4.38 4.47 4.6 4.7 13.53%
DDR333 3.93 4.07 4.2 4.21 4.27 4.36 10.94%
DDR266 3.82 4.01 4.06 4.08 4.22 4.27 11.78%
SDRAM 2004/1/27 2004/1/28 2004/1/29 2004/1/30 2004/2/2 2004/2/3 Change 
1Mx16/166 1.18 1.18 1.23 1.23 1.23 1.2 1.69%
4Mx16/166 3.24 3.3 3.33 3.33 3.32 3.3 1.85%
8Mx16/133 3.53 3.55 3.58 3.59 3.6 3.62 2.55%
16Mx16/133 5.26 5.22 5.16 5.14 5.14 5.14 -2.28%
16Mx8/133 3.89 3.95 4.06 4.12 4.14 4.19 7.71%
32Mx8/133 5.87 5.91 5.94 5.99 6.02 6.03 2.73%
 
   List I       
   Source:DrameXchange data
 
More capacity allocated to SDRAM
 
As we mentioned, the limited DRAM supply to the spot market caused by the increasing capacity allocation to flash and relative low yield rate at the early stage in 0.11um process migration. Besides, we found out the capacity allocated to SDRAM increased since early January. On October 1, 2003, Avg. prices for SDRAM 32Mx8  and DDR 32Mx8 333MHz were $4.46 and $4.44 respectively, and the pricing trends for SDRAM and DDR diverge since then. SDRAM was in strong upturn momentum while DDR was in downward trend.
 
On November 7, 2003, SDRAM 32Mx8 133MHz had $1.00 premium over DDR 32Mx8 333MHz, ($5.39 vs $4.37 ). ( Chart I ) DRAM makers started to evaluate whether the SDRAM demand would keep strong and pricing trend would remain firm to be worth to allocate more capacity to SDRAM for higher profit margin. We got more positive answers from DRAM makers that they would increase SDRAM output around late November and early December and observed the output for SDRAM did increase in early January which caused the total DDR monthly output reduced around 10 million units accordingly.
 
Based on this observation, what needs to be noticed next is whether the premium SDRAM over DDR will be shrinking and will the increased output for SDRAM drag the prices down or only slow the upturn momentum.
 
 
Items Specification 2003/1/1 2003/11/3 2003/12/1 2004/1/2 2004/2/2
SDRAM 32Mx8 133MHZ 4.46 5.27 5.65 5.77 6.02
DDR 32Mx8 333MHZ 4.44 4.46 3.97 3.7 4.27
Premium 0.02 0.81 1.68 2.07 1.75
 
    List II
   Source:DrameXchange data
 
 
 
    Chart I
   Source:DrameXchange data
 
1H February contract prices increase 1.5% - 2%
 
The 1H February contract prices are not finalized yet, however, according to our checking with sources, the prices should increase around 1.5% to 2%. Even though the spot prices for DDR 32Mx8 has been traded $4.7, $4.36 and $4.27 for 400/333/266 MHz respectively today ( 2/3/2004) , the upside for contract prices is still limited by PC OEMs’ aggressive bargaining power and DRAM makers’ shipment pressure around this time. ( Chart II)
 
 
                                                                                       
               
     Chart II
       Source:DrameXchange data 
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