TAIPEI, Taiwan - Dec. 27, 2005 -DXI index value grew by 1.13% (or 30 points) to 2,695 last week, which signifies a price rebounding sign for DRAM makers. Those DRAM makers who were reluctant to release stocks under the weak pricing atmosphere in turns stimulated a eTT (UTT) prices rebound. During the Christmas holidays at Hong Kong (Dec24-27), traders tended more cautious on inventory control with some system integration (SI) and OEM makers conservative to source for more stocks before yearend, transactions thus remained limited.

Spot prices of mainstream 256Mb DDR 32Mbx8 400/333/266 MHz chips stayed flat at US$2.1 Dec.27. Price of eTT (UTT) chips rebounded from Dec. 20's US$1.98 to Dec. 27's US$2.02 as those US$2 priced chips are rare. 512Mb DDR2 64Mbx8 533MHz also enjoyed its price uptick with the growing transaction volume, thanks to the rumors of growing tight supply. Related prices stabilized at US$3.73, up slightly from Dec. 20's US$3.72.

2HDec DRAM contract prices hint price rebound

Buoyed from the spot prices upbeat and growing strong demand, some chipmakers attempted to raise contract quotes in 2HDec. Overall DRAM contract prices stood firm in 2HDec with most DDR and DDR2 for desktop (DT) and notebook (NB) applications stayed flat and some modules for server applications even enjoyed growth.

DRAM contract prices start trending down from September with the drop of DDR module reaches 22% and DDR2 reaches 32%. DRAM makers force to reshuffle capacity allocation and product mixture amid the severe price drop pressures, as evident in the DRAM supply bit growth that was trimmed down to 2.65% in November, versus the 10% sequential bit growth that records during September and October. DRAMeXchagne foresees that a certain DRAM maker may suffer from capacity reshuffle issue and unable to produce the requiring amount DDR2 for the contract market in January.

US-based PC OEMs usually see a massive drop of DRAM inventory levels in December along with the seasonality impact with DRAM contract prices should drop in a relatively large rate along with the demand drop. The scenario swings this year with contract prices keep staying strong, thanks to the previous DRAM price drops. This implies contract prices should bottom out with a price rebounding chance about to emerge.

A majority of DDR and DDR2 modules, no matter for the desktop or notebook segments, stay flat in 2HDec with modules for servers even enjoy growth. Most DRAM makers are optimistic about the price trend for the next update and project price raise.

DRAMeXchange foresees some DRAM makers should continue quoting DDR2 at a lower rate than DDR in order to encourage DDR2 sales. As chipmakers vary among each other on respective DDR/ DDR2 production ratio with relative customers demand also varies at the meantime, the quotes for DDR and DDR2 should report with slight difference among players.

Last minute order before Christmas spurred 2Gb NAND Flash spot price up 3%

Spot price for high-density NAND Flash spot prices keep heading south with a slowing down pace. Of which, 16Gb is the only part that suffered drop last week. Low-density flash chips, on the contrary, trend positively with spot price for 2G grew by 3% over the week Dec. 20-26.

Spot prices for 1Gb, 2Gb, 4Gb, 8Gb, and 16Gb NAND Flash, up 1%, 3%, 0%, 0%, and down 1% respectively, which closed at US$7.62, US$15.29, US$26.25, US$44.28 and US$72.1 on December 26.

Although MP3 player makers were still looking for available 1Gb and 2Gb NAND Flash at the spot market, supply remained limited as players from the US, Europe and Hong Kong started having their long holidays from the latter part of last week. The limited circulated NAND Flash chips thus boosted price of the 2Gb grew by as much as 3% at US$15.29 on Dec. 26.

Moving towards to 2006, DRAMeXchange believes the impact of the upcoming Chinese New Year (during late Jan06) should start to surface. Although the anticipated demand growth should persist during 1HJan, the spot price percentage growth should depend on NAND Flash makers’ output statuses.