DDR prices stick to high and SDRAM remains strong
Little change since last week, the prices for 256Mb 32Mx8 DDR400/333/266 were traded in narrow range of average at $4.44, $4.18 and $4.07 respectively. Usually, January and February are relative low demand months at the first quarter. As we track the pricing trend back, DDR 266MHz part reached its high of $8.88 on November 4, 2002 , declined to the bottom of $2.93 on February 18 ,2003 and rebounded to $3.7 on April 8, 2003. It just followed the seasonal pattern that the prices usually bottomed out in February as the demand gets better in March. We have concluded the
unexpected soaring spot prices from the beginning of 2004 were driven by the slow supply growth, higher PC content per box and inventory re-stocking. We believe all these issues have been factored in current high prices. We believe that the estimated pick-up demand in March will lead to higher shortage ratio and be the next driver for the spot pricing.
We have seen some signs as we observe the trading activities in the DDR spot market. Although the market trading activities are slow and prices couldn’t move further these days, the parts quoted below the market prices were soon taken. This shows that the marketers still hold expectation for future pricing uptrend. The market keeps in balance at slow demand and limited supply. Once the demand gets higher or the supplier gets tighter, the prices will move higher and vise versa. Currently, Samsung’s DRAM output determines the DRAM bit growth for the next month and there’s still some uncertainty for Samsung’s capacity allocation to DRAM and Flash.
At the end of 4Q03, inventory level at both OEMs and in the distribution channel were extremely low. PC OEMs, especially HPQ and Dell have piled up their inventory since 2H December. However, being constrained by the limited supply and concerning the slow demand, both OEMs and channel distributors could only increase their inventory levels a bit higher, we estimate. Therefore, the need for inventory replenishment will be another driver to move the prices up.
SDRAM remains strong momentum
The market momentum for SDRAM parts keeps active. 1Mx16, 4Mx16 and 8Mx16 were up 4.2%, 6.9% and 2.3% respectively from $1.19, $3.48, $3.82 to $1.24, $3.72 and $3.91. The market trading activities are focus on 4Mx16, 8Mx16 and 2Mx32. Even overseas traders come to Asia market for 4Mx16 and some factories come to spot market for 2Mx32, 4Mx16 and 8Mx16. The high density SDRAM 32Mx8 didn’t perform as well with increasing supply.
3H March Contract prices to be flat or slightly up
The spot pricing trend plays a leading indicator for the contract prices. DRAM makers seem to intend to increase their offers higher in reflection of the strong spot prices and PC OEMs forecast. However, the PC OEM’s sensitivity to higher memory cost per PC and flexibility on adjusting the PC content per box still limit the upside to DRAM contract prices. We project the 1H March contract prices to be flat or slightly up if supply remains limited.
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|
2004/2/17 |
2004/2/18 |
2004/2/19 |
2004/2/20 |
2004/2/23 |
2004/2/24 |
Change |
|
256Mb 32Mx8 |
|
|
|
|
|
|
|
|
DDR400 |
4.44 |
4.44 |
4.46 |
4.47 |
4.44 |
4.42 |
-0.45% |
|
DDR333 |
4.19 |
4.19 |
4.20 |
4.20 |
4.18 |
4.12 |
-1.67% |
|
DDR266 |
4.07 |
4.06 |
4.08 |
4.09 |
4.07 |
4.06 |
-0.25% |
|
SDRAM |
|
|
|
|
|
|
|
|
1Mx16/166 |
1.19 |
1.19 |
1.20 |
1.23 |
1.24 |
1.24 |
4.20% |
|
4Mx16/166 |
3.48 |
3.51 |
3.52 |
3.67 |
3.72 |
3.73 |
7.18% |
|
8Mx16/133 |
3.82 |
3.84 |
3.85 |
3.88 |
3.91 |
3.95 |
3.40% |
|
16Mx16/133 |
5.10 |
5.10 |
5.10 |
5.10 |
5.10 |
5.10 |
0.00% |
|
16Mx8/133 |
4.50 |
4.50 |
4.50 |
4.59 |
4.60 |
4.66 |
3.56% |
|
32Mx8/133 |
5.92 |
5.92 |
5.90 |
5.89 |
5.90 |
5.89 |
-0.51% |
