Persistent sluggish demand continues to weigh on DRAM pricings at both contract and spot markets. DRAMeXchange sees no price rebounding strength for DRAM in near term but NAND Flash prices should continue trending upward amid growing Christmas impact.

Spot prices for all DRAM trended down over the week October 25-November 1 with only DDR2 512Mb 64Mx8 533MHz stayed against drop with a narrow down price drop. Efficiently tested (eTT) 256Mb DDR, also trended down by a slight 0.93% and closed at US$2.13 on November 1. Price of 2Gb 512Mx8 NAND Flash enjoyed the largest growth of 5.71% among all other Flash chips while the high-density 8Gb part only grew by a slight 0.6%.

Suffered by sharply dropping DDR2 prices, some DRAM makers with higher portion on DDR2 have already adjusted their allocation between DDR2 and DDR. We believe DDR2 oversupply will be eased a little in November and December as DRAM makers to produce less DDR2 from September 2005.

Demand for NAND Flash, on the other hand, is relatively vibrant. Despite contract prices for NAND Flash trended down, the market seems still holding positive outlook about sales during Christmas. We observe that industry players start reducing the amount of NAND Flash sales at the market, which pushes some OEMs shift to source for memory from some other sources in order to build up sufficient stock to meet the yearend blossom.

This strong demand for NAND Flash should persist through late November or even prolonged through early December. In order to avoid potential lost, memory traders should release some more inventory to the market by December as OEMs should have stock sufficient memory while demand for Flash should also starting sliding.