In the past week, the DRAM spot market really had some dramatic changes, and October 1st was the turning point. At the beginning of last week, the market was under the cloud of holiday effect, for the coming holidays of China, Korea, and 1 day holiday of Taiwan. Except the preparation for holiday inventory buyers, most Asian buyers backed off from the market made the spot market very slow. Only some US and Euro players were in it, inquiries were few.

On Friday, the demand suddenly came out in spite of the China and HK holidays started. Asian buyers started looking for Samsung, Infinion, and UTT, There is a big chance that contract price might go up again for the 1H of October. The Samsung original 256MB DDR module price even offered at 42USD. As a benchmark, this might be another factor that warmed the market up. The market got hotter and hotter, traders' phones kept ringing and trading volume increased, ended the sluggish situation at the beginning of the week. Module houses play a major role on the buying side.

The flash market is weak recently, the price upward of 1G and 2G NAND caused by the product mix change and the testing procedure delay of Samsung is over. The average spot price of 1G had down from 11.13USD to 10.6USD. The SDRAM spot price remains stable, 1Mbx16 and 4Mbx16 remained about 0.7USD and 1.6USD.

As the demand and supply is concerned, the DRAM market supply doesn't meet the demand sufficiently. On the demand side, the major motherboard venders such as ASUS increased shipment this month. The action of module houses keep buying from the spot market to meet the PC OEM orders is quite powerful, and this means that it is the real demand instead of inventory accumulation. Both circumstances mean the real demand is increasing for sure. On the supply side, the testing of 0.11um chips seems not so smooth and becomes the bottle neck of DRAM production. These situations might keep the spot price going up or at least remain high for the rest of the month. There is a big chance to see the spot price of 256Mb DDR 400 going for 5USD in the near future.

*Jeff Chen, Marketing Intelligence Team, DRAMeXchange

DRAM spot prices - 2004/9/27~2004/10/05