Jan. 24, 2006 -DXI went up by a slight 0.7% (or 22 points) to 3,158 last week. DDR2 spot pricing still remained strong while queries for DDR were weak. As Powerchip Semiconductor Corporation (PSC) starts releasing its Mira-brand eTT (UTT) at the spot market with a price tag of around US$2.1, many buyers are still awaiting for further price reduction; thus, limiting the overall DDR demand.

Spot price of DDR 256Mb 32x8 400MHz stayed at US$2.33-2.32 with the same density eTT (UTT) price dropped slightly by 4.5% to US$2.13. Demand from memory module makers hold DDR2 prices firm last week with a sequential growth of 7.4% to US$5.03.

For the contract market, DDR2 512Mb 32x8 533MHz still lead the price growth with a rate of 3.5% at US$4.09. Respective 256MB and 512MB DDR2 module prices were quoted at US$17.83 and US$35.67. DDR 512Mb 32x8 400MHz stayed flat at US$4.14 with 256MB and 512MB module prices stayed at US$18-18.5 and US$36-37.5.

Despite the spot price of DDR2 has exceeded US$5 last week, DRAMeXchange expects the contract price raise in 2HJan should be still weaker than the recent DDR2 price up momentum as PC OEMs are locked in long term contract with PC OEMs from Nov05. Some DRAM makers are optimistic about the anticipated DDR2 5-10% price ups and this optimistic outlook should benefit DDR with stabilized price trend or slight growth.

DRAMeXchange expects to see inventory issue emerges among channels in 1Q06 amid the massive ramp of PC shipment in 4Q05. Despite PC shipment should shrink by 10-15% QoQ in 1Q06, we expect DRAM capacity should decline at the meantime with some even report capacity shortages. DDR2 demand at the clone market is eventually picking up and some memory module makers have also start sourcing eTT (UTT) DDR2 chips. Sources indicated that printed circuit boards (PCBs) for DDR2 are lagging demand, which should prompts a steady price upward trend to persist through February.

Price drop follows temporary NAND Flash price hike

NAND Flash demand for high-density parts was strong with related prices peaked during Jan18-19. Spot prices of 4Gb to 16Gb parts were even reported with a price hike of as high as 5% weekly average over the week Jan17-23. Low-desnity parts, however, headed south in compare with previous weeks.

Spot prices of 1Gb dropped 3% to US$7.05 and 2Gb dropped 4% at US$13.38 on Jan23. Prices of 4Gb,8Gb and 16Gb all enjoyed price growth with respective rate of 3%, 5% and 1%, and closed at US$21.54, US$38.48 and US$74.42 in the same period.

DRAMeXchange observes that the present NAND Flash spot prices still enjoy a price premimu over contract prices at a range of 5-23%. Among all parts, we figure that 2Gb is the item that enjoys the highest price premimum.

Supply for high densities' NAND Flash chips of 4Gb to 16Gb is still concentrated with first tier contract customers. The elimiate hot seasonaltiy from previous Western fesivals has led to a release of 4Gb to 16Gb NAND Flash parts to the spot market from western regions. With the sever price drops which happened during the past month, on hand stock for speculators in the spot market is scarce, thus limiting current supply for these NAND Flash parts in the spot market. Countered with the urgent demands from Asian module houses on high density memory cards, NAND Flash spot prices were pushed up 6% in a single day during the peak dates above mentioned.

We regard this price surge as a temporary situation. As most factories in China start to shot down and prepare for their annual break this week prior to the Chinese New Year. Memory module houses and traders should also start clearing stocks before the two-week long holidays to avoid future price drop risk over the holiday. DRAMeXchange believe limited transaction amount should drag overall NAND Flash prices down from Jan23.