Limited supply of eTT parts boosted eTT price up to $2.30

With a continuous limited supply of eTT(UTT) parts to spot market, eTT price surged from $2.20 to $2.30 in past week as many module houses tried to purchase in more eTT parts for inventory. Also, we have seen a speculative demand involved as more traders hold the eTT parts on-hand in anticipation of uptrend prices. However, eTT prices dropped a bit to the range of $2.26 to $2.27 today as some traders' profit taking action.

DDR2 512Mb's premium over DDR 512Mb shrink to only 5%

With increasing demand on DDR 512MB in spot market, DDR 512Mb has gained higher popularity in past weeks, the price has been up to $5.16 in June 28 from $5.02 in June 21. However, DDR2 512Mb 533MHz price continue to go down to $5.42 from $5.48 as market expect a further lower prices in the near future. The DDR2 512Mb premium over DDR 512Mb has shrank to 5% currently from 30% in the beginning of 2005. We believe DDR2 512Mb spot prices will continue trending down and even cross below DDR 512Mb in the third quarter.

DRAM capacity continue to shift to NAND flash in 2H 2005

According to our regular checking with all DRAM makers, we've observed the one Korean DRAM maker has aggressively allocated more DRAM capacity to Nand flash. The wafer-in of its Nand flash in the fourth quarter is to increase to three times of its wafer-in in the first quarter. Therefore, its DRAM supply bit growth will be seriously dampened from the end of the third quarter. Though 90nm will be applied in DRAM starting the third quarter, we don't expect a mature yield rate in the initial migrating stage.

Beside, USA and European DRAM makers also have plans to double their Nand flash wafer-in since the third quarter. Though, their current capacities for NAND flash are still in low level and won't count much impact on the DRAM supply in the fourth quarter.

According to DRAMeXchange Market Intelligence, DRAM supply bit growth for 2H 2005 will be slower than the bit growth in 1H 2005. With an expectation of PC OEMs seasonal and inventory build demand in the third quarter, we've projected a shortage of DRAM supply in August, September and October 2005.