DDR2 1Gb eTT Spot Price Rose 5% with Low Volume This Week

DDR2 1Gb eTT spot price has drop to the US$ 1.04 on June 12 from US$ 1.34 on May 11 with -22% MoM. The decline has been accelerated from the beginning of June, which price has almost reached the confidence limit- US$ 1. Spot price increased to 5% to US$ 1.09 this week since Hynix and Nanya try to keep increase contract price. The spot market shows the trend of ascending price with low transaction volume.

In spot market, the price has increased to the short-term high US$ 1.34 resulted in the chip shortage due to the shipment control by the main supplier-PSC and Elpida. However, the price started to fall back to US$ 1.04 since other DRAM vendors try to clean inventory with low price and Elpida and PSC shipped to module houses with reluctance of shipment control policy. Despite of the rebound in spot market this week, the price will fall to the zone between US$ 1.0- US$ 1.2 under buyer’s hesitation and low transaction volumes.

DDR2 Contract Price for 2HJune Will Remain Flat While DDR3 Will Maintain the Growth Momentum

In contract market, DDR2 800 Mhz 2GB contract price has increased 26% to US$ 21.5 at 1HJune from US$ 17 at April. With declining spot price and slow PC shipment forecast in second half of the year, the price upward degree for 1HJune contract price has shrunk 4%-6% and the growth will be comparably slow. We believe the price will remain flat. DDR3 contract price is estimated to show an upward momentum with the increasing demand in DDR3 chips due to the CULV platform and PC-OEMs strategy. We believe the DDR3 contract price will keep increasing and the price gap between DDR3 and DDR2 will be enlargered.

NAND Flash Price Remains Flat Due to Quarter-End Effect and Slow Season

NAND Flash market has remained stable since the beginning of June. As for demand side, the market has not fully recovered and end-product sales are perceived weak.

The launch of new generation iPhone is expected to have some positive impacts on the market and other cell phone vendors also introduced series of high-end smart phone at the same time. That is, the demand from cell phone system customers has been highlighted. However, demand from other main application such as memory card and UFD still remain weak due to the floppy end-user demand and quarter-end effect along with the inventory adjustment. Therefore, downstream clients are more conservative toward the purchase and would rather postpone the spending.

NAND Flash price has reached the chip cost level and vendors look forward to seeing their favorable price in the future so that they can show the profitability figures. On the other hand, customers are reluctant to see the weaker demand trigger by increasing cost and unaffordable product price especially for the future star product -SSD. We believe the short-term NAND Flash contract price will remain flat under the dynamic environment such as quarter-end effect, traditional slow season and new products launch.