DRAM contract price to trend up steadily through September

The spot price uptick still concentrate on DDR chips last week while the narrowing down price gap of DDR2 chips proves the ongoing migration to higher frequency DDR2. For contract market, the upward price trend is believed to persist through September.

DXI value grew by 43 points to 3,559 in Aug 2-8, a reflection of the upward spot price trend. Price of DDR 256Mb 32Mbx8 was boost by the persistent shortage with both branded and non-branded (eTT/UTT) chips report sequential gains and closed at US$2.77 and US$2.76 on Aug 7. The higher-density DDR 512Mb 64Mbx8 also enjoyed growth and closed at US$5.38 on the side-benefit of an industry-wide positive DDR price trend.

Price gap of higher-frequency DDR2 512Mb 667MHz with 553MHz further shrink to US$0.09, versus the difference of US$0.18 in the week before, thanks to the cost benefit that ramping up 90nm proportion of 90nm offers. For DDR2 eTT (UTT) chip, which is widely circulate at the spot market, also reports a gain of 0.9% on week and shows narrowing down price difference with branded chips.

Overall DRAM contract price grew by 3-5% in 1HAug. DDR enjoyed relatively higher growth amid the severe supply insufficiency with quotes of DDR 512MB DIMM already reached US$46. Although DDR2 did not enjoy as much price gain as DDR, those players who quoted their chips in relatively low rates saw price correction. Contract prices for DDR2 512MB 533MHz DIMM averaged at US$41-44 while the same-spec. 667MHz chips closed nearer to 533MHz and report slight gain in 1HAug.

DRAMeXchange projects DRAM contract prices will continue trending up through Sep. However the price up momentum should not be critical because PC OEMs slow down their procurement amid the recent price rebound, disregard most are bullish about the new Vista may bring to the DRAM market.

NAND Flash prices stabilize; Apple again to supplement catalyst soon

Spot prices of NAND Flash stabilized after being dampened from the swell of inventory in the 1st week, thanks to the reduced stocks from upstream makers and recess of consumption among downstream players. Encouraging price sign is ahead as Apple may start resuming its stock procurement at Samsung and Hynix again after mid-Aug.

The sequential drop of over 10% that recorded in the 1st week no longer exists with prices improved a lot. Downstream players who still hold sufficient stock on hand did not yet resume their incentives to source for stock during early Aug. Both Samsung and Hynix also contribute to the price stability as both of them reduced contract quotes during 2HJul and early Aug to similar levels as spot quotes.

The closed prices of NAND Flash chips over the past one week tell us that only 1Gb part is still subject to rapid drop. Prices for the mainstream 4Gb and 8Gb swing in the range of 1% while 2Gb and 16Gb also only record a fluctuation of 1-2%. 4Gb chip is the density that able to resist price drop pressure most.

DRAMeXchange projects steady pricing trend to persist in the 2nd week with demand is still observed. Although the factor to spur price seems missing at the moment, we do expect Apple to start sourcing from Samsung and Hynix again after mid-Aug -- a catalyst that may fills the NAND Flash market with positive trend.