DDR 256Mb 32Mx8 drifted sideway at $4.70 range

In a continuation of May's and last week's trend, volume levels were anemic, speaking to participants' lack of conviction to the market in weak demand season. The DDR 256Mb 32Mx8 spot prices were drifting sideway near $4.68, $4.70 and $4.77 respectively in past week. UTT was traded at $4.18 to $4.20 and Elixir, $34 to $34.5 in spot market.

More Infineon DDR parts shown up in the spot market, indicating an increase on its DDR production output resulted in resolved 0.11um problems since May. Samsung released more original modules instead of memory chips to spot market. This action benefited some factories but made it harder for module houses to purchase in Samsung memory chips.

The drive to support the DDR spot prices at the $4.70 range is demand from Chinese market. Chinese marketers kept buying UTT and Hynix DDR 32Mx8 266MHz from Hong Kong and Taiwan in past week.

SDRAM 4Mx16 spot price slid from its peak of $4.45 in mid April to the range of $2.8- $2.9 this week after Samsung increased its supply to spot market. As demand in consumer electronics sectors turned stronger, Samsung and Hynix remained their contract offer for 4Mx16 at $3.0.

We expect DDR 256Mb 32Mx8 spot prices to pick up soon as approaching the hot demand season. Our projection is based as following :

Motherboard shipment in May from Taiwan's top four makers - Asustek Computer, Elitegroup Computer(ECS), Gigabyte Technology and Micro-Star International (MSI) declined 9% from April to 5.97 million units, better than 11% decline in marketers' estimate.

According to major motherboard makers, the QoQ growth rate for the third quarter is projected as 15% to 20%. In past week( June 5 to June 12) , unit production volumes for the top four increased 2.1% WoW ( week on week ) from 1.46 to 1.49 million units. Units at Microstar, Asustek and Gigabyte increased 3.3%, 2.8% and 1.5%, respectively, unchanged for Gigabyte.

As for notebook shipment, we estimate 10% growth QoQ in the second quarter and 22% growth in the third quarter.

Content per box ( memory installed per system ) is still growing. We believe most PC OEMs will remain or keep increasing the 512MB installed ratio if DDR 256MB contract prices not to go higher. However, PC OEMs would reduced the content per box as the prices go higher than $45.

2H contract prices is still under negotiation. DRAM makers are facing aggressive price cutting from PC OEMs even though their demand is still good.
We project the 2H contract prices for 256MB DDR SDRAM to remain flat to 5% down.