After the series of financial reports released from worldwide DRAM makers, the third quarter indeed brought them brilliant sales revenue. With approaching to Thanks Giving day and Christmas holidays, the hot season for commercial electronic products, not only DRAM manufactures but PC OEMs also hold the optimistic views of the forth quarter.

The sufficiency of 12 inch fabs and 0.11-mircon process migration revealed by DDR 256Mb average cost figures, $3.02, down 9.3% from $3.33 last quarter, and we forecast the cost for the forth quarter will be down to $2.77, surveyed by DRAMeXchange marketing team. Then, we can see Chart 1 and Chart 2, where is the higher margin coming from? Healthy spot, contract prices and lower cost!

While the supply side runs smoothly, will the demand side be strong enough to lift the whole market up? As for our Market Intelligence database, we predict motherboard shipment for 4Q will increase 5.6% in line with notebook shipment 14.7%. Those figures reflect that we believe prices are going to be drove by PC OEMs sourcing the components from market for the hot season's coming.

Although, in the short term, we hold the optimistic attitude to the whole market; we still worries that rising oil price will shrink consumers' money and drag their purchasing power down, then price will just increase very slowly rather than boost!

Chart 1

Chart 2

*Bonnie Lin, Marketing Intelligence Team, DRAMeXchange

DRAM spot prices - 2004/10/19~2004/10/26