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【Market View】DDR 256Mb spot prices drifted lower with sluggish demand


Published Aug.16 2005,18:32 PM (GMT+8)

By Joyce Yang, Marketing Intelligence Team, DRAMeXchange

The mainstream DDR 256Mb 400/333MHz prices have drifted within the narrow range of US$2.68-$2.73 over the period July 15 to August 5. However, prices started dropping slightly since August 6. Spot prices for DDR256Mb 400 and 333MHz were traded with a sequential drop of around 3.3% and 3%. Spot prices for the same density 400Mhz parts were traded from US$2.70 to US$2.61 while 333MHz’s were traded from US$2.71 to US$2.63 over the week August 8-15.

eTT (UTT) parts also suffered drop, spot price for 256Mb eTT part was down from US$2.56 to US$2.50. The discouraged demand had stimulated vendors offering price cuts accordingly. However, the downward spot prices did not boost transactions, we found transactions limited. Not many vendors dumped memory to the market as they hold projection for an upward trend to emerge soon.

Contract prices to be slightly in 2H August

Although DRAM makers are trying to raise quotes with an aggressive mode, PC OEMs are still bargaining over the prices with reference to the negotiations that settled in the first half of August. We observed that most DRAM makers may disappointed by PC OMEs as the range of price up should be limited within a US$0.5 range or just stay flat as last update's.

DRAMeXchange forecasts that both contract and spot prices should resume its upward strength in September, buoyed by the growing strong demand from Europen market and the traditional seasonality impact.

By Judy Chen, Marketing Intelligence Team, DRAMeXchange

NAND Flash spot pricings suffered slight drop of 2-4% this week

Transactions for the NAND Flash spot market grew weaker over the week August 9-16. Despite OEM demand coming from MP3P and handsets remains strong, spot market demand remained weak. Some brokers and traders tend to turn skeptical about the otherwise optimistic pricing trend and started selling goods.

Spot prices for 1Gb, 2Gb, 4Gb and 8Gb NAND Flash spot prices dropped by 2%-4% and respectively closed at US$7.08, US$13.22, US$23.45 and US$45 on August 15.

August NAND Flash contract price remain down trend

The fierce competition in the NAND Flash market continues to push major suppliers to offer price cuts for high-density parts in order to block new comers. Such aggressive moves boosts demand for higher density NAND Flash leaving the late comers to suffer lower margin with slower technology migration and lower yields. This remains unchanged for August. We believe, contract price will still adjust slightly downward even in current NAND Flash shortage. The largest contract price drop will be located at the highest NAND Flash available, 16Gb. We estimate 16Gb will drop by 10% in August, down from July's US$100. Thus, pushing NAND Flash mainstream density to migrated from 2Gb to 4Gb with the continue cost deduction induced by density and process migration.

To better explain the incentive for both supply and demand to move to higher densities on a cost per MB basis, we will take 16Gb as example. Based on our theory of 10% price drop for this month's contract price for 16Gb and calculate on cost per MB basis, we will get US$0.04 per MB which is lower than 2Gb's single chip cost, at US$0.05. Driven by this lower cost per MB, demand side makers are encouraged to continue migrating to higher density NAND Flash and in turn increase total MB consumption. End users, at the meantime, will also benefit and have more incentive to buy.

Updates on August NAND Flash contract price will be released on August 17 on DRAMeXchange website!


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