DDR2 eTT chips quotes raised; upbeat signs shown for DDR2 in spot market

DRAMeXchange sees rapid growth in DRAM spot prices last week and this wave of price upbeat boosts our DXI trended up to 3,464 from 3,405. The over 18% price adjustment of DDR2 eTT chips last week drew marketers' spotlight and showed an upbeat sign for the DDR2's penetration in spot market. DDR prices, at the meantime, keep steady on the recess on both demand and supply.

PSC quotes its DDR2 512Mb 64Mbx8 eTT (UTT) chips from $3.6 to $3.8 after seeing higher demand of DDR2 in the spot market last week.Price of higher density DDR 512Mb 64Mbx8 400MHz gained 3.3% to $5.05. As mentioned in our previous weekly dispatches, the strain of DDR supply persists and continues to boost DDR 16Mbx16 to $2.28 amid graphics makers' aggressive procurement at the spot market.

As 865-series chipset still account for about 30% of Intel's chipset shipment in 2Q, several PC system makers who supposed to considerably reduce their DDR demand were prompted to request for more DDR shipment from DRAM makers, thus bolstering up DDR contract prices in 2Q along with the uptick of spot prices. DRAMeXchange records that spot price growth of the same-spec. eTT DDR 256Mb was far higher than branded chips. Tracking back the historical price records, the price difference of these two chips eliminated after April, versus the $0.30 price difference that once recorded in March.

Since previous demand for DDR2 is keep delaying and does not show any meaningful strength to grow strong, PSC offered its eTT DDR2 chips a price difference of over $1 than major branded DDR2 of the same density. The price gap of $1 was much higher than the reasonable $0.40 level. After sensing the warming up demand for DDR2, the chipmaker is now raising its eTT DDR2 chips from $3.60 to $3.80 and spurred a new wave of price up last week. Quotes for DDR2 eTT had once shot to $4.27, representing a 18.3% price gain on a weekly basis. Prices of DDR2 512Mb 64Mbx8 533MHz enjoyed the side benefit and also trended upward slightly to $4.72 whereas the higher frequency 667MHz chip was boost to $4.88.

DRAMeXchange regards the rapid price rocket of DDR2 eTT (UTT) chips as a correction of the price level with branded chips. The price difference of the branded DDR2 and eTT DDR2 512Mb chips are now edging to $0.42 (DDR2 512Mb 533MHz: US$4.72 vs. DDR2 eTT US$4.31) and further proves the price uptick. We expect the entire market should further fill positive strength for further growth for both contract and spot market.

Tepid NAND Flash demand arrives, Samsung helps regulate market equilibrium

The listless NAND Flash price trend finally warms up from July. Despite DRAMeXchange still recorded a 3-5% drop in the first week of July, prices show stabilizing signs in the second week. We observe that Samsung that has adjusted its supply deployment also helps cultivating the positive pricing environment.

Since most NAND Flash-based applications adopt 512MB and 1GB density of chips, we record the sequential price fall of 4Gb chips hold stronger power to resist price drop pressure, especially when its demand is relatively strong. The price fall of 4Gb part limited in 1% range and we even observe prices trended up several times last week. Overall price fall for all density chips trended weak and managed to be steady.

Samsung also assists to sustain the stabilize price trend. Sources told us that Samsung quoted its chips to contract customers at a higher price range than spot customers. In addition to the healthy market outlook that came along with Samsung's price adjustment, the chipmaker who has not yet release stocks to customers at Greater China regions in July also helps.

Samsung holds its stock-release in attempt to help long-established customers digesting their inventory and incubate demand growth.Customers, on the other hand, resume their interests to source for chips from spot market without worrying continuous rapid price fall.Marketers who still hold stocks on hand also start releasing inventory to the spot market when spotting the warming up demand. The entire market is trending healthy.

Intel's market share regain to shadow AMD's growth through 3Q

Intel strives to seek momentum to extend its market share via pulling in series of new CPU lineup in 2H06. It also prepares price adjustment for its old generation platforms at the meantime in attempt to retain its dominancy and position at the CPU market against rival AMD. AMD, under this fierce fight back from Intel, foresees lower-than-expected financial records in 2Q06 in returns and this negative impact is likely to persist through 3Q.

Following the server-sue Xeon 5100 that debuted in June, Intel is said to introduce its new desktop (DT) CPU Core Duo, codenamed Conroe, at its Santa Clara HQ on July 27. What trails behind this upcoming Conroe will be the Merom CPU that designs for notebook (NB) applications in August.

Intel will propose a new program of price reduction along with the upcoming Core Duo launch to suppress the market share growth of rival AMD. The proposed price adjustment highlights that Intel does purposely reduce its quotes in order to pressure on AMD's single-core Athlon 64 and entry-lvel Athlon 64x2 sales.

The chipmaker will reduce prices of its entry-level dual-core Pentium D to as low as US$93 (per thousand lots) or about 40% drop. For the mid-range Pentium D series, Intel will reduce Pentium D-940 from US$224 to US$183 (22.4%); Pentium D-950 from US$316 to US$224 (29.1%) and Pentium 960 from US$560 to US$316 (40.4%). Price of Pentium D-805 will slash from US$143 to US$93 (34.9%) and Pentium D-820 from US$178 to US$133 (36.5%).

Rival AMD should suffer revenues setback amid Intel's dedication to regain market share and the impact should mirror the weaker than expected 2Q financial results. AMD admitted the large scale price reduction from Intel should drag its 2Q revenues down 9% QoQ than the gudiance's US$1.33bn and the market's general estimated US$1.3bn, though the amount should still grow by 52% YoY. Despite AMD did hit record-high sales record for its server-sue Opteron, sales for entry-level CPUs and mainstream NB and DT CPU lineups should both slip.

Projecting its 3Q outlook, AMD should still shadow under Intel's aggressive price cut pressure as with the upcoming Conroe CPU launch in late July and the mentioned price adjustment on older generations platforms.