DRAMeXchange sees DDR2 512Mb eTT spot price to hit a new low this year

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2007-09-11 18:09

Taiwan--(뉴스와이어)--Last week the DRAM spot price was in an evident decline, where the average drop for the DDR2 exceeded 10%. Due to the weak spot market demand, it has spurred many retailers and module houses to sell the DRAM chips at lower prices, resulting in the DDR2 eTT price to fall through May’s low of USD 1.32, down by 17%.

According to DRAMeXchange's recent research report, the significant spot price erosion remains closely correlated to the sluggish market demand. As the second half of the year usually marks a typically stronger PC market, many module houses and retailers increased their DRAM inventory during the end of 2Q07. Based on the 2Q07 earnings report of each respective module house, the average inventory level rose to more than a month’s worth. Yet, as the PC market enters into September, the PC upturn will not last long. Coupled by the gradual DRAM price decline, many manufacturers have started to clear away their excess inventory. These actions subsequently prompted prices to slide even further.

DRAMeXchange believes that the overall chip supply will increase minimally in 4Q07. Although Taiwan DRAM makers will have several new operational 12 inch fabs during the quarter, mass production will not occur until 1Q08. As for the Korea players, in the wake of Samsung’s power outage incident in August, it has diverted some of its DRAM production to Flash instead. In general, the overall industry supply in 4Q07 will see limited growth.

"As the current DRAM prices have fallen to the manufacturing cost levels of DRAM makers, chances for a spot price rebound has increased. Contract prices currently have a price gap of more than 20% with the spot price. Thus, they are expected to continue trending downwards, and thereby draw closer to the spot price," said DRAMeXchange analysts.

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