Feb. 7, 2006 -Spot markets for both DRAM and NAND Flash could be characterized as notionally stable amid the absence of Asia transactions during the recent Chinese New Year. Contract prices for DRAM, at the meantime, show a benign price up momentum with the mainstream DDR2 512Mb 64Mbx8 533MHz chip leading the growth with a stunning 18% sequential growth.

DRAM spot pricing trend stays stable

DXI stabilized at 3,112 over the week Jan31-Feb7, correctly reflecting the still market transaction at Asia regions during the recent Chinese New Year.

DRAM spot prices were stable last week. Prices of DDR2 512Mb 32Mbx8 533 MHz grew slightly to US$5.17 (from US$5.15) while the same specification 667MHz chip recorded a price up of 0.76% from US$5.24 to US$5.28 amid the tight supply. Demand for eTT (UTT) chip rebounds after the Chinese festival with related prices rose to US$2.02 from the previous US$2.0. Spot prices of DDR, on the contraty, slashed during the same period with DDR 256Mb 32Mbx8 400MHz stayed flat at US$2.27 and DDR 512Mb 32Mbx8 400MHz dropped slightly to US$4.24 (from US$4.26).

DDR2 contract prices show stunning growth in 1HFeb

DDR2 module contract prices record an average of 15-18% sequential growth in 1HFeb. Contract price of DDR2 256MB DIMM 400MHz reached US$20-21.5 (up from US$17-18.75) and 512MB DIMM reached US$40-43 (up from US$34-37.5) respectively. DDR2 modules, however, were traded at lower price levels as no inventory issue has been observed yet. Sequential growth stays at 9-10% with 256MB DIMM contract prices reached US$19-20.5 (up from US$17.5-18.75) and 512MB reached US$38-41 (up from US$35-37.5).

DRAMeXchange sees commodity DRAM output drops noticeably from mid Dec05 amid Samsung's strategic capacity reallocation for NAND Flash and niche ICs production. The chipmaker has continue boosting the wafer in proportion for mobile RAM and graphics memory from 4Q05 and in turns spurs demand to shift to fellow DRAM makers.

Despite the inventory pressures among DRAM makers and the locked contract prices with OEMs had limited DRAM contract prices grew by a slight 3-5% in 1HJan, the aggravated DDR2 shortage hints contract prices rebound from 2HJan. DRAM makers proposed to raise 256MB and 512MB DDR2 DIMM prices to US$20 and US$40. Encouraged by some DRAM makers' successful price adjustment to first-tier OEMs, some even raised respective DIMM quotes to US$22/44 levels for second-tier customers. These PC OEMs were forced to accept the price up amid insufficient supply.

Listless NAND Flash spot trading induces price drop of 1-5%

NAND Flash demand was whittled down among Asian regions by the recent Chinese New Year as most buyers and factories were on holiday during this festival break. DRAMeXchange only observes limited transactions at the region sinc most manufacturing sites are located at the region.

Spot prices of most NAND Flash chips suffered price drop over the week Jan31-Feb 6 with only 8Gb parts kept stable at US$38.84 while others suffered a price fall of 1-5%. Spot prices of 1Gb dropped 1% at US$6.96, 2Gb dropped 5% at US$12.02, 4Gb dropped 1% at US20.66 and 16Gb dropped 3% at US$70.02.

DRAMeXchange does not see transaction picked up significantly on the first trading day after the long holiday on Feb6. Although memory card makers sourced for 4Gb-16Gb parts, overall buying incentives were limted. Most industry players are holding conservative view for any big move and wait for clearer price indication after the upcoming contract prices release in mid Feb.