Trading in the DRAM spot market remained sluggish with limited volume last week. DRAM distributors and traders in China were hesitant to buy DRAM chips at this price level in spot market, and module makers in the US also daily lowered their target price. Furthermore, in line with spot price drop in the first half of November, the contract prices between DRAM makers and PC OEMs in the second half of November were down 1.5% to 2.5% last week. Average prices of mainstream 256Mb (32Mb*8) 400MHz DDR DRAM dropped from US$4.3 on 15
th, Nov. to US$4.10 on 22
nd, Nov. Typically in Dec., some DRAM manufacturers have pressure to release their inventory level for better annual financial results, but demand from PC OEMs will drop in December because of low demand. Therefore, with strong supply and weak demand, we foresee that contract and spot prices will drop quickly in Dec. In conclusion, we keep our negative view to spot DRAM price and contract price.
In SDRAM spot market, demand was low, but sellers try to maintain at this price level. Nevertheless, some traders sold 4M*16 SDRAM at the price below US$1.0 these two days, meaning that some sellers who expect price will be downward attempt to realize and limit their lost by selling their inventory. As a result of absent unexpected demand and still high inventory level, we think average price of 4M*16 SDRAM will drop further in short term.
In NAND Flash market, only a few companies have ability and technology to produce high density NAND Flash products. Because of limited supply and strong demand to 4G NAND Flash, average price of 4G NAND Flash increased to US$38.02 on 15th, Nov from US$36.52 on 22nd, Nov. Unlike those high density items, other NAND Flash items remained stable last week. Source indicated that some NAND Flash makers will release 1G NAND Flash products to spot market a couple of days later. Therefore, the price of 1G NAND Flash has more pressure to drop this coming week.
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