In DRAM spot market, the trading activities after Christmas became more sluggish than before. According to the previous two contract pricings, we believe that demand from PC OEMs is indeed weak in Dec. However, some DRAM vendors actually shipped their output in advance in Nov. and some others seem to keep their chips on hand, so we concluded that they keep some inventory to maintain this price level in spot market for a while. On the contrary, buyers also notice this situation; hence, they decide to wait for lower price rather than buy more in the slow season. Because of rush orders from the US for Christmas and limited supply from DRAM vendors in the spot market, the prices of DRAM products remained stable last week. Average prices of 256 Mb (32M*8) 400 and 333 MHz DRAM components are between $4.05 and $4.06 and at $3.82, respectively. Therefore, with strategic inventory and weak demand, we forecast that spot price will remain stable or drop slightly next week and that contract price will drop further for the first half of Jan., 2005.

In SDRAM market, some companies, especially for those of IC designs, have been still losing money under the current price of low density SDRAM. We do not see any signal for price rebound next week, because buyers will not have any motivation to purchase too many chips, especially at the last week of 2004. On the other hand, low density SDRAM companies won't release too many chips to the market next week. Therefore, we believe that spot price of SDRAM will either drop slightly or remain stable next week and that contract price of SDRAM will still hold for the first contract pricing of 2005. In NAND Flash spot market, some NAND Flash makers released their chips but demand was stagnant last week; as a result, average price of 2G NAND Flash drop from $17.34 on 21st Dec. to $16.58 on 27th Dec. Because Micron and Hynix recently launched their 2G NAND Flash products successively, we predict that Samsung will react to cut price strategically in the future to affect competitors' market share and profitability. We can foresee that 2G NAND Flash will be very competitive in 2005 and the price of 2G NAND Flash has not yet reached bottom.