DRAM spot price remained stable due to offset effect from China's Labor long holiday and month end billing pressure

Last week was the week prior to China's Labor Day (from May 1 to May 10); demand surged from makers who need to pile up stocks for the long holiday and pushed DRAM spot price up. However, it was also the last week of April, with the month end billing pressure quantities of supplies showed up in spot market and pushed DRAM spot prices down. Adding these two price influencers together, making last week's DRAM spot prices stable. Mainstream DRAM chip prices for last week are as follows, DDRII 256Mb 32Mbx8 533MHz and 512Mb 64Mbx8 533MHz prices were USD3.66 and USD6.04, respectively; DDR 256Mb 32Mbx8 400MHz and 333MHz spot prices were USD2.39 and USD2.36, respectively.

Main focus of inquires last week was on eTT. Demands not only come from China, but also from US. More and more players in the spot market are interested in purchasing eTT. Spot price last week was like taking a roller coaster. Price went from USD2.22 down to USD2.05 and went back right up to USD2.2. With price approaching maker cost, most makers are unwilling to lower the price below USD2. Thus, we believe price rebound for eTT is foreseeable in the near future.

SDRAM spot demand remained sluggish

High density chips such as 256Mb 16Mbx16 133MHz and 128Mb 8Mbx16 133MHz remained the center of inquires last week priced at USD3.65 and USD2.07, respectively. Low density SDRAM spot demand is still poor since the main usage comes from contract market making last week's spot price slight lower than last.

Demand for high density capacity has switched to low density

NAND Flash demand has stopped being strong like first quarter this year as MP3P and memory card demand decreased. The MP3P fewer which started in Jan with the introduction of iPod Shuffle not only off set balance between NAND Flash supply and demand but also pushed mainstream capacity upwards. Since then, we have seen huge price drops on other brands of MP3P on high capacities such as Creative to maintain market share. As for the demand of memory cards, we believe first quarter demand was from the after market of last year's Christmas purchase. However, current NAND Flash demand has changed to Cell Phone. This is a significant capacity drop on overall NAND Flash consumption since current mainstream cell phones consumption capacity is still 64MB(512Mb).

Price trend last week was price drop for high density chips (4Gb and 8Gb); stable for densities of 1Gb and 2Gb; and price increase for low density chip 512Mb. Inquires for 512Mb chips was the hottest last week making the spot price to increase 4% to USD5.44. The cause for this is due to good demand from bundle sales memory cards or embedded NAND in cell phone. However, with current limited supply on 512Mb, price went surging. Spot price for 512Mb will keep on a raising trend still supply increases. Next month one of the Korean manufactures will start sampling 512Mb in 90nm. By then, supply and demand for 512Mb will again gain balance.