By Rickie Yang, Marketing Intelligence Team, DRAMeXchange

The Spot traders observed a short-term price bottom arrival last week.

In the spot market, DRAM suppliers didn’t release too many inventories last week, so the spot price seemed to hit the bottom. In general, DRAM vendors will try to maintain the lowest possible inventory level at the end of every quarter for their financial result, so that the spot price will be pressurized to drop. After the end of the previous quarter, the spot traders have come to realize that the spot price will be stabilized in April, thus the spot price has shown a rebound during the first few working days of April. As a result, the average price of 256Mb DDR 400MHz is increased from US$ 2.45 on Mar. 28th to US$ 2.55 on Apr. 4th.

Contract price will be dropping further this week!

In the first or second month of the fiscal quarter in the year 2005, people had been convinced that the DRAM suppliers normally have less pressure on the release of inventories compared to the latter month in March. However, PC OEMs and DRAM vendors have expected that the worldwide PC shipment will be sluggish in 2Q05. DRAM suppliers are currently intended to use strategically throat-cutting price to stimulate DRAM consumption. According to our market survey to DRAM suppliers and PC OEMs, the first contract price of this April will probably be dropping approximately $2 for 256MB DDR. Because of the significant downtrend of the contract price, the insiders’ disclosure revealed that the price of UTT or eTT parts will be dropping further. Therefore, the spot market traders will experience more pressure on the release of their inventories for the next two weeks.

The NAND Flash spot marketers seem to be cautious.

In the NAND Flash spot market, Samsung have aggressively released NAND Flash components last week. While some traders made the sales in advance last week, the insiders indicated that those stocks would be distributed to the spot market this week. The NAND Flash players will be releasing more output in 2Q05 because the system makers have booked a lot of orders for the new product arrival for the iPod shuffle effect. In 2Q05, it is a slow season for consumer electronics. We doubt if the end users will consume much of the end products that used NAND Flash. Otherwise, NAND Flash will be oversupplied and the spot price will drop significantly. In summary, it takes one more month to reflect the NAND Flash spot market status because a longer supply chain period is required. If you would like to find out more about the NAND Flash price trend in advance, you will have to pay attention to the sales status of end products.