DDR2 contract price in 2HDec remains stable, DRAMeXchange finds

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2006-12-26 16:30

Taiwan--(뉴스와이어)--Due to the approaching Christmas holidays, module vendors and brokers are adopting a wait and see attitude. Minimal transaction volume has resulted in the DRAM spot price to grow weaker. The DRAM contract price remained relatively the same in 2HDec, as several PC OEM makers have been experiencing better than expected sales, according to DRAMeXchange.

In light of the upcoming Christmas holidays, module vendors and brokers have been unwilling to increase their inventory levels. The same situation can be seen in the Chinese and Hong Kong markets as well. Transactions in the spot market have been weak, rendering a more evident price decline for last week. DDR2 512Mb 667MHz slipped to $6.45, while DDR2 eTT dropped to $5.43. However, the continuing price drops seems to have begun to generate some sales. After the DDR2 eTT slid to $5.5, relevant buying is seen to be on the increase. Some are still betting on the memory upgrade demand that Vista will create in Q1, 2007.

The DDR2 contract price in 2HDec remains stable. Most of the DDR2 512MB 667MHz contract price has been above $50, which is mainly attributed by a better than expected sales in the NB end market. Thus, minimal changes are seen in the DRAM contract prices, as manufacturers prepare for the channel demand in Q1, 2007. In light of the changes in the mainstream memory specifications, DDR demand is rapidly diminishing. DDR 512 MB 400MHz has already dipped below $43.

Although the DRAM spot price has been consecutively dropping for several days, the market is still placing high hopes on the expected memory upgrade cycle generated by Vista. Despite the low price, DRAM buying is still ongoing. Nevertheless, the home edition of Vista will not be released until the end of January, 2007. Thus, demand will not become evident until Q2, 2007. The DRAM contract price is projected to fluctuate only slightly, as it is supported by the aggressive stockpiling from PC OEM makers in the traditionally slow season. The gradual decline in the contract price should help minimize the price drop range in the spot market..

Micron¡¦s Q1 financial results for fiscal 2007 (Sep~Nov) showed that its sales revenue experienced a 15% QoQ increase. Net profit reached $192 million, which was 3 times higher than the $64 million recorded for the previous quarter. The main reason behind the profit jump lied in the DRAM price hike, which rendered a 31% gross profit. As Taiwanese DRAM makers only produce DRAM products, they also enjoyed a 50% gross profit for Q4. Despite the expected price drop for 2007, DRAM makers will be enjoying another good year in 2007, as the cost for the 90 nm manufacturing process dips below $2.5.

About DRAMeXchange

DRAMeXchange is a global primary provider of future intelligences, in-depth analysis reports and advisory services on DRAM and Flash memory industry with coverage including current business, spot trading prices, and market trends, capital spending and wafer capacity trends, the impact of DRAM/flash memory products on the market, and other relevant PC industry information.

Founded in 2000, DRAMeXchange serves more than 50,000 clients, including high level company officers, procurement salespersons as well as technology firms and investment community. DRAMeXchange supports IT industry executives, memory related companies, and the investment communities to make fact-based decisions on memory purchases and deploy business strategy. Information about DRAMeXchange and its researches can be found at www.DRAMeXchange.com.

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