The DDR spot market atmosphere is kind of paradoxical last week. While price remained stable, the trading volume kept decreasing. Most market participants were watching instead of engaging.

Back down to the fundamental. From the demand side, the actual demand from PC OEMs in December is weaker than in November. On the supply side, the total output of DRAM manufacturers has a more than 10% MoM increase in November and still expected to grow in December. Under this kind of circumstance, supposedly that the price of DDR should at least slide down, but on the 1H of December the price actually did go up.

In the second week of this month, the major brand chips were much lighter traded than in the first week. Although the buyers are not too aggressive, the major brand parts are not easy to find in the market. According to dependable source, we didn't really hear major parts released last week except eTT did once. Here we conjecture that the reason DDR price was stagnant and remained under the circumstance of "hort term fragile balance"is that both supply and demand are both slow.

The contract price of 2H December might be an issue that can explain the weird 1H market situation. Since the contract PC OEMs account for the major proportion output of the DRAM manufactures, with the 1H December scenario that Christmas rush orders and yearly budget consumption in China brought up the spot price. The DRAM manufacturers might like to see the spot price, which is sort of a reference for contract price settlement, remained high to negotiate a better contract price and have better sales revenue for December. 

The SDRAM short term rally ended, although IDM and the design house both decreased their output slightly, the inventory level issue remained. The demand from consumer electronics did not see any upside change, either.

Meanwhile, the NAND Flash price stayed stable until some Korean vendor released lower density parts at end of last week, 4G and 8G NAND are still short but no strongly demanded unless it's necessary.

Combining with the seasonal reasons, we expect the DDR spot price might be back to its downtrend sometime in the coming future since the actual demand is weak and output of DRAM manufacturers is still growing, and so far there is no serious sign showing that DDRII event will take place in the next week, unless something exceptional happens.