DDR 32Mx8 256Mb 400/333/266 MHz continue to drift lower and traded along their lows of the week as market participants showed little buying interest in past week. Volume has been anemic all the week, and has left the market vulnerable to swing.

On July 16, Elpida Memory, Inc. and Micron Japan filed a petition for imposing countervailing duties on imports into Japan of DRAMs manufactured in the Republic of Korea by Hynix Semionductor, Inc. Hynix has stated the petition was not appropriate. However, even it will take one to two years to investigate the CVD petition, Hynix 32Mx8 333 MHz chips got hit with a round of selling on July 18.

Rumors spread around the spot market that Chinese gamblers adjusted down their bets on Hynix to $4.40 based on the projection of a negative impact by CVD petition and a selling pressure upon approaching to the month end. The DDR 32Mx8 333MHz even slipped below the DDR 32Mx8 266MHz with the dumping in Hong Kong market.

Intel launched DDR2-Grantsdale chipset for desktop on June 21st 2004, one month later than its original schedule. According to a news on Digitimes, Intel is likely to delay the launch of its Alviso chipset ( for notebook ) to the first quarter of next year, according to sources at Taiwanese notebook makers. Intel also delayed the launch of Lindenhurst from June to the third quarter, 2004.

Many DRAM makers have adjusted down their projection for DDR2 penetration rate of 2004 due to the DDR2 chipset postponed by Intel. According to module houses, the DDR2 512MB unbuffered DIMM is offered at $220 and 1GB DIMM, $450, a great margin over DDR1 modules of the same density even though the DDR2 chip costs are much higher than that of DDR1. However, they indicated, the DDR2 supply is not sufficient even the demand is extremely low now.

2H June contract prices for DDR 256MB DIMM have dropped 4% to 6% from the range of $41.5 to $44 to the range of $39 to $42. According to the DRAM makers, the demand from OEM customers remain stronger, however, most OEM customers are very aggressively cutting the prices to below $40 to reflect the gap between spot and contract prices. We believe, as demand pick up in the third quarter, DDR spot and contract prices will be boosted up followed by projected shortage.