| DRAMeXchange> Weekly Research> DDR, SDRAM prices drift higher steadily |
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【Market View】DDR, SDRAM prices drift higher steadily
Published
Mar.09 2004,19:23 PM (GMT+8)
DDR, SDRAM prices drift higher steadily
DDR DRAM 256Mb 32Mx8 up 3% to 4%
Even the spot market momentum turned slow and spiritless in past week, the avg. prices for mainstream DDR 256Mb 32Mx8 266/333/400 MHz were trading up 4.88%, 4.56% and 1.79% to $4.30, $4.36 and $4.55 respectively in Asia Market today. What to be worth noticing on last week’s trading was one marketer sold some parts of DDR 256Mb with quite below market prices for uncertain reason. The parts were soon taken and the prices were quickly back to the previous level. We believe most marketers hold same anticipation on DDR pricing trend to support DDR prices sustain at current high level. What difference is, as the upside of the prices seems to be constrained in the short term, the traders become calmer on speculating trading. However, the module houses have concerns on current higher prices and try to make deals with DRAM manufactures to control their costs. DDR 32Mx8 333MHz has been the most wanted parts in the spot market since a large quantity has been booked by PC OEMs. According to our checks with channels, the demand is moderate in February and turns slightly better in March. China market outperformed USA and Europe markets, supported by stronger economy growth.
Mature rate on 0.11um to postpone to 2H04
As we mentioned before, the unexpected soaring DDR DRAM prices from the beginning of 2004 was boosted by the limited supply to the spot market as most DRAM makers are struggling to overcome the 0.11um learning curve and seem to have postponed reaching mature yield by two quarters to 2H2004. In theory, the 0.11um design rule could increase DDR 256Mb production volume by 1.5x to 1.6x relative to 0.14um/0.15um design rule. Currently, most DRAM makers have reached mature rate around 80% on 0.14um/0.15um design rule, that means the yield rate has to reach at least 50% for production volume crossing over, not yet to mention the depreciation cost of new equipments for 0.11um process node.
Besides, the capacity increased in 2004 will be mostly contributed by 12 inch fabs. According to our survey, capacity on 8 inch fabs will increase only 2% while it will be double on 12 inch fabs in 2004. Therefore, 15% capacity increased are mainly from 12 inch fabs, counting the contribution from 0.11um migration, the DRAM bit growth in 2004 is estimated to be 46%, far less than 54% in 2003. Many marketers predict there will be shortage in DRAM supply as they believe PC growth rate to be around mid-teen and corporate replacement demand expected to show up in 1H04. According to DRAMeXchange “Market Intelligence”, DRAM would suffer 4% shortage in March compared to 1% shortage in February.
Flexible policies on “Memory per System” by PC OEMs
In 2002, memory installed per system rose sharply as 256MB became the standard rather than the former 128MB. 256MB has remained the norm so far and the ratio of 512MB is getting higher according to our survey. We believe as Intel launch the Grantsdale chipset on 2Q04 would encourage a transition to a total of 512MB, however, we don’t expect this development to result in explosive growth in memory per system as Grantsdale to take 30% market share to the end of 2004 and supposing 50% to 65% memory installed to be DDR2, in our estimate.
Regarding “Memory per System”, Dell holds very flexible policy on this to control the budget ratio. Last fourth quarter, Dell had cancelled the offer to free upgrade memory for all PC systems when the 256MB DDR DRAM contract prices sustained at $40 to $42 and started this promotion in January 2004 as the contract prices has been dropped to $30 then. Even we believe Dell still gets good prices from most DRAM suppliers, Dell has reduced 512MB installment ratio from this month for pricing upward concerns, we suspect.
In the short them, the DDR DRAM prices are supposed to sustain at current level, we estimate. Whether PC OEMs to take more parts for strategic inventory pile-up or to reduce the memory per system significantly will determine the direction of the pricing trend on the second quarter. And, sure ! DRAM makers’ output allocating to spot market will be the key, too.
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