Prices should hover around current levels this week.

:: SARS piles on the pain in Asia.

No doubt public fears are exaggerated, but the fallout is evident The good news, however, is that the SARs has had not actual impact on the physical side of the production yet. DRAM manufacturers are still running at full utilization. However, the psychological effect is taking its toll on the demand side as seen from weakening shipments. Given China role as an important locomotive for the regional economy, the closure of the IT shopping malls and offices is slowing down the economy activity. Some companies (module makers, traders, brokers) estimate a 50% drop in shipments figures in the clone market, further accelerating the downtrend. Thus, the economic growth in the U.S. and Europe will remain vital to Asian exports going forward.

:: Price should hover around current level.

Despite the delay in shipments, as well as the sluggish economy, DRAM spot prices are relatively stable. This is due to the following factors. 1. Easing of the month-end pressure on sales. 2. Traders take a wait-and-see attitude in early month 3. As SARS disrupts China’s Golden Week, a high season for sales, it may put actually help the downtrend trend of the DRAM prices 4. The upcoming launch of new Intel chipsets -- Intel 865 series. 5. As inventory cost of some traders, channels and module makers' are higher then current prices, they are not willing to sell below cost.

Therefore, we expect brand chip prices to hover at the current range as there is neither a strong demand to push up prices, nor any major factors to trigger a panic sell-off. In contrast, the situation of the white box and UTT (untested) chips are relatively volatile. Prices for these chips range between $2.5 to $3.

:: SO-DIMM demands are still stable.

SDRAM SO-DIMM and DDR SO-DIMM for PC OEM customers are still hot. DRAM contract allocations for those Notebooks are still tightening. However, the fears of tightening supply in the future may encourage some OEM companies to accumulate inventory to ensure that they are able to fully satisfy the demand from their customers. May contract prices for notebook SO-DIMM memories seem to be firming up compared to the prices of DIMMs' for desktop PCs. Transactions in the consumer DRAM chips' are already showing some signs of slowing down in the coming month (as GDP figures are revised down.) Although some observes believe that the quarantining policy and the SARS effect may increase end demand, we don't expect that to offset the overall downtrend.