By Joyce Yang, Marketing Intelligence Team, DRAMeXchange

DDR spot prices stay flat amid bullish outlook but NAND flash trends downward

Spot pricings for mainstream DRAM remained flat over the week July 19-26 amid positive outlook. However, we believe that spot price for 256Mb DDR will pick up again soon and approach the level of US$3 and reach the peak during September to October upon the seasonality effect.

The flow of spot prices for various frequencies DRAM stayed within the range of a single percentage point. Transaction at the spot market was constrained by the optimistic outlook with traders and vendors tend to held stocks on hand rather than pushing stocks to the market

The lack of momentum strength had constrained the extension of the previous price rally. Such a market trend also applied on eTT (UTT), spot price for 256Mb(32Mbx8) only suffered a price drop of 0.38% over the past week and closed at US$2.62 on July 26.

For low-density SDRAM segment, we observe that the output reduction among Korea-based Samsung Electronics and Hynix Semiconductor had aroused interests among China vendors. Stimulated inquiries from these vendors had boosted 16Mb(1Mbx16) SDRAM spot price grew 1.54% over the past week and closed at US$0.66 on July 26.

NAND Flash pricings, however, show slight downing trend with only the high-density 8Gb part stayed flat. Prices for 1Gb to 4Gbit NAND flash were trending downward with an average of 2.3% drop.

Major players ramp 12-inch capacity but growth constrain by continual allocation of NAND flash production

Major DRAM makers are gearing up respective 12-inch capacity with some eyeing the niche market. We believe that memory makers should see a better profit making environment from September amid the continual reallocation to NAND Flash production. The tight DRAM supply upon the continual reallocation, should be also eased after October along with the ramping 12-inch capacity.

DRAMeXchange foresees that some leading memory makers including Samsung, Japan-based Elpida Memory, Taiwan-based Inotera (the joint venture of Infineon Technologies and Nanya Technology Co.), are all ramping respective 12-inch fab capacity ahead of schedule.

Samsung has announced to ramp up its line 13 capacity to 45k and 50k through these two quarters, up from the initial scheduled 40k and 42k. The Korea memory giant had also revised its bit growth estimation by an increase of 9 percentage points to 56% for 2005.

Elpida, in the meantime, will start mass production at its E300 Fab-Area 2 ahead of schedule by two months. Volume production will be commenced in October with a capacity reaching 12K wafers at the end of 2005.

Inotera, which should attain a capacity of 42k now and reach 54k in October, could report capacity edging to 60k in December.

In line with the ramping 12-inch capacity among the listed memory makers, we also see the trend of raising proportion of niche memory production upon risk concern. Infineon Technologies and Nanya Technology are co-developing GDDR3 (graphics DDR3 GDDR3) chips and the production proportion for such memory should also be also increased.

For Elpida, the company is eyeing the high-margin memory segments, which include memory being adopted by servers, digital consumer electronics goods and mobile phones, etc. Tracing the first fiscal quarter (ended in June) financial record of Elpida, memory which adopted by servers, digital consumer electronics goods and mobile phones contributed 21.5%. 42.3% and 25.87% to its overall net sales.

Although memory makers are ramping capacity and extend presence at the niche market, DRAMeXchange observed that overall bit growth is constrain by the continual NAND Flash reallocation since late June. One of the two leading Korea-based memory makers had switched an addition 8-inch DRAM capacity for NAND Flash during the late first quarter, according to our research. DRAM makers who had suffered loss in the second quarter could have see a compensation with the rebounding DRAM prices along with the coming hot season impact in the third quarter.