Month-end effect?

DRAM makers is selling but not dumping

As time approaching the quarter end for Micron and month end for rest of DRAM makers, marketers anticipate the sales pressure from DRAM makers to erode spot price down. DRAM markers are definitely trying to low their inventory level at the end of month which can release the pressure from the beginning of Sep. to help them hold the price up at early month again. So far, we observe more aggressive bundle-sell onto spot market via special channels (like good relationship's module makers) and can find some 256MB DDR original module are selling at $2~$4 low than their contract price especially from US market. Nevertheless, we don't hear / see any seriously dumping sell activities from market; the spot price on DDR is still relatively stable while SDRAM price faces the difficulty of keeping afloat upon the variable cost.

Bundle Sell

Bundle sell: If buyer wants to buy DDR, buyer also has to take certain SDRAM portion as a package selling. The proportion of DDR and SDRAM is different from company to company, but we believe it is more like to be 1DDR:1SDRAM or 2DDR:3SDRAM right now.

Our assumption on bundle sell makes the DDR price upward chance higher than downward since the buyers have to rely on profit gain from DDR to offset the potential loss from SDRAM. Therefore, DDR price for this week probably slightly down or flat because of month end effect, but from beginning of Sep. it might be in uptrend.

Module makers keep normal activities

Major module makers from Asia Market keep normal business activities. They don't mount inventory to expect the price gain from coming seasonal PC demand strong anticipated for 4Q02. That implies that they are conservative on 4Q seasonal demand picking up. On the other hand, they are not too pessimistic on 1h of Sep.'s price status due to either "artificial" price support from market makers or the real demand from CPU and chipset price cutting effect.

Channels (Distributors and traders) are waiting

It seems the Asia market has the consensus on DDR spot price has the support and will try to rise on Sep.; they are trying to buy the lower cost of DDR to gain the profit. But the US DRAM market seems pretty weakness and volatility due to the uncertain of the War.

Spot price keeps flat or slightly downtrend.

Overall, the month end effect and uncertainty of coming Sep.'s demand cause spot price flat or slightly downtrend for rest of week.