DDR2 eTT chips posted noticeable appreciation; 2HJan contract price likely to see a mild growth

DRAM spot price recap, Jan 14-21

Spot prices of both 512Mb eTT and branded DDR2 chips dropped below the US$1 mark on Nov 7 and Nov 23, 2007. Prices hit bottom after trending downward for about a month’s time, with eTT parts closed at US$0.75 on Dec 11 and the branded parts hit US$0.92 on Dec 18. 

After hitting the price bottom, prices are expected to resume above US$1 level. Both chips found their prices surpassed the US$1 mark on Jan 17 and 18. As of Jan 21, prices of eTT part stood at US$1.09 and branded part at US$1.10. Price of eTT part once climbed to US$1.21 level.

Reviewing price trend during Jan 15-21, price of 1Gb eTT posted the highest growth at 21.6%, where 512Mb branded parts also posted a sequential gain of 14.7%.

Comment

DRAM spot trend shows that the magnitude of growth as seen in eTT chips (in both 512Mb and 1Gb density) was higher than branded ones. This either suggests that a fundamental demand recovery spurs eTT prices to outgrow branded chips’, or suggests that circulated volume of eTT chips is higher than branded chips.

As eTT DRAM is sensitive to market trend, corresponding prices often take a faster and more rapid reaction over any industry trend, even the trend is just a speculation. When price environment is good, prices of eTT usually enjoy higher gain than branded chips, and vice versa.

Despite 1Hs as the traditional slow seasons for PC sales, DRAMeXchange reiterates that price of DDR2 512Mb should stabilize at US$1 range in 1Q08. When price of DDR2 drops below US$1, DRAM makers could hardly survive under this environment for more than a quarter’s time as the price tag has edged to their variable cost level. In order to stop bleeding from red, they are forced to adjust their capacity and capex. Price of 512Mb DDR2 has resumed to US$1 mark amid news about some DRAM makers’ planned fab maintenance and upcoming demand swell prior to Chinese New Year in early Feb.

Having seen DRAM spot prices appreciates by 15-20% recently, DRAM makers are confident to seeing that DRAM contract price to post a minimum of 2-3% sequential gain in 2HJan, as most vendors had already settled prices with suppliers in Dec.

MacBook Air – thinnest SSD NB that holds your breath

Steve Jobs, CEO of Apple, again raised eyebrows and screams when he pulled out the less than one-inch thick MacBook Air just like a document from a manila envelope during the Macworld Conference & Expo on Jan 15.

The world’s supposedly thinnest notebook (thickest portion: 1.94cm; thinnest portion: 0.4cm) is equipped with advanced specifications: 13.3-inch LED-backlit panel, multi-touch technology (same as iPhone), 802.11n WLAN connectivity, etc. Speculation about the adoption of SSD (solid-state drive) in future Apple notebook is being justified, as evidenced in the optional 64GB SSD that was listed in the specification list.

Macworld Conference & Expo draws spotlight by launch of eye-catching and innovative products every year, just as how iPhone amazed the crowd at last year’s event. When Apple started to introduce NAND Flash as the storage media in its iPod-series MP3 (PMP), it created a strong impact on the entire NAND Flash equilibrium and pricing trend thereafter.

Thus, Macworld Conference & Expo is actually not just an event for the mass to look for exciting designs, but also marketers to get a portrait about how the NAND Flash market may trend.

Although Apple did not introduce iPod and iPhone that supported higher-density NAND Flash storage space as expected, nor any new devices that featured NAND Flash as the storage media, DRAMeXchange believes that Apple will continue to bring new opportunities for the NAND Flash market via launch of new products.

As MacBook Air features 80GB PATA interface HDD (hard-disk drive) with SSD as an optional storage choice, its launch will bring catalyst to Apple notebook sales, but initial impact over NAND Flash equilibrium will be lesser than iPhone and iPod. MacBook Air that features HDD and SSD are targeted for different market segment as suggested by the retail price. Price of HDD-equipped model is US$1,799 while the SSD model is US$3,098.

2HJan NAND Flash contract price recap

NAND Flash contract price stood flat in 2H Jan08. In light of the large price cuts of NAND Flash in 4Q07, the purchase demand from NAND Flash downstream makers have steadily resumed since 1HJan08. Moreover, NAND Flash downstream makers have started to build their inventories for the coming Chinese Lunar New Year holidays sales. The NAND Flash contract price can thus stay stable in the near term.

NAND Flash spot price recap, Jan 14-21

In the SLC segment, 1Gb part stayed flat and closed at US$2.13; 2Gb dropped 2.3% to US$2.96; 4Gb dropped 2.3% to US$5.61; 8Gb dropped 4.6% to US$10.90 and 16Gb dropped 0.6% to US$22.47. In the MLC segment, 4Gb dropped 5.3% to US$2.31; 8Gb up 0.3% to US$3.15; 16Gb up 5.7% to US$5.94 and 32Gb up 4.7% to US$12.15.