DRAM contract price growth to weaken in 2HOct

DXI continues trending upward from 4,385 to 4,395, despite overall transaction mute amid holidays at some Asian regions. DRAM transaction has not yet warm up right after the week-long holiday at China (since Oct 1) while both Japan and Taiwan were still in holidays during early Oct. DRAM spot prices were notionally trending downward and results in the narrowing price gap with contract price. Price of DDR2 eTT (UTT) had been reduced to US$5.90 and branded slightly dropped by 0.6% to US$6.59.

Following the 2-4.5% sequential price up for overall DRAM contract price in 1HOct, we believe the price growth magnitude should be weakened in 2HOct. Reviewing the settled prices in 1HOct, prices of DDR2 533MHz 512MB were settled at US$46-48.50, thanks to some PC OEMs' success to adjust their negotiation once a month. Prices of DDR2 667MHz 512MB that were closed at US$46.50-49 in the same period has marked the narrowing down price premium over the same density of 533MHz DIMM.

DRAMeXchange sticks to our released guidance and predicts that contract price growth of DRAM for 2HOct will be either weakened or stay flat amid the ramping up 80nm output from Korean players and fresh capacity from Taiwan players' 12-inch wafer starts, as well as the prolonged negotiation frequency (twice to once a month) among some PC OEMs.

NAND Flash prices to stay firm amid strategic supply policies

Spot prices of NAND Flash should held firm recently due to the constrained supply that secured among downstream players.

Supply of NAND Flash should remain tight in Oct since key suppliers continue reserving their stocks for big customers like Apple, Sony, SanDisk and Kingston. Ever since suppliers prioritize their stocks for selective customers from Sep, the stocks that downstream players at Greater China region could obtain are comparatively lesser than the amount they landed during Jul-Aug.

Although the secured stocks among downstream players are limited, they do not aggressively ramp up their procurement since some regions (e.g. China, S. Korea and Taiwan) usually have their long holidays during 1HOct. Suppliers, on one hand, reserve their stocks for the mentioned customers; and they usually do not have any supply plan to customers at these regions on the other hand. DRAMeXchange believes NAND Flash spot prices should stick to its firm price trend this week amid the mentioned supply and demand situation.

Reviewing the price trend during Oct 3-5, 8Gb enjoyed the largest gain of 1% and closed at US$16.60 while 16Gb was the only part that suffered slight drop of 0.2% and closed at US$35.76. For other mainstream parts, 1Gb stayed flat at US$2.81; 2Gb grew 0.2% at US$5.21 and 4Gb grew 0.6% at US$8.08.