DRAM market is struggling with little visibility.

:: Inventory level are mixed in the channel.

DRAM manufactories - are certainly accumulating inventory right now as OEM customers lowered their purchase volumes and the spot market is not large enough to consume the excess volume during the downtrend.

Most module markers- actually have limited chip inventories these days as prices are falling day by day. Currently, every chip loses several cents when they become part of a module even as the cycle time for a chip to become module are shorter than a week - depreciation on this is way too high. Therefore module makers are buying the minimum amount necessary for current production.

Distributors - are a different story - they don't consume DRAM by themselves, but most of them do carry certain amounts of inventory from time to time or are forced to carry some inventory during the month end for DRAM makers. Therefore the average purchasing price for those inventories are probably higher than the current spot price level.

Traders and brokers - most are really low in inventory.

PC OEM customers - have an average level of around 1 month which is sufficient for their production usage. Some customers who have more than their production needs are even trying to adjust down their inventory levels into the spot market.

:: Prices are struggling with low visibilty of direction.

After DDR 256Mb 266MHz price plumeted down over 30% from early of Feb until now, the average price has now fallen below $3. The rapidly declining price makes some marketers that are holding prices higher than current spot prices - leading to an unbalanced inventory level in the channel. This is creating a certain room for prices to struggle further with no-stopping the downtrend or possible stability for a very short break. Although marketers all sense prices can keep trading down during the current oversupply situation, the market also can be manipulated in the short-term. This week we sense market sentiment is directing into various ways. DRAM makers are trying to hold prices tight a little bit. Stories (facts?) of buying activities from Mainland China are slightly back? Some Europe and US marketers are also placing small volume orders. Prices below the sellers holding costs are not hesitating to sell right now, however, once prices go higher, the orders can disappear.

:: DDR contract will plumb down below $35.

Macro view, market prices are dependent on the supply and demand ratio. Obviously, there's no way to escape from the oversupply situation right now. Seasonal low volume shipments (motherboards, notebooks and PCs) of Feb are not going to help on the demand side. White box (Non-branded) modules are flooding the market and are seriously damaging spot prices - and will bring down contract prices as well. DDR contract prices are expecting to be brought below $35 for 256MB. The range probably will fall down to $30~$35 level. It's still over 15% higher than spot prices.