DRAM contract price expected to slip 10% in 2HSep, says DRAMeXchange

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2007-09-20 08:38

Taiwan--(뉴스와이어)--Amid the weak DRAM spot market, prices continued to slump. The DDR2 512Mb 667MHz declined to USD 1.54, a drop of 7.8%. The same downward price pressure could be seen in other chip densities, where the DDR2 eTT slipped to USD 1.31. Prices have been on a declining trend since August, due to sluggish market demand, and a wait and see attitude from both buyers and sellers. However, after the DDR2 eTT fell through the low point experienced in May, some retailers and module houses have begun to increase their inventory levels. This helped bring up the spot prices last Thursday, which also indirectly improved the overall market buying.

Amid the rapid descent in the spot price, and with inventory levels of PC OEMS already sufficient for the hot selling season, some OEMs have started to cut the number of orders that were agreed upon during 1HSep.

According to DRAMeXchanges survey, contract prices have mostly been finalized at USD 16~17 in 2HSep, a 10% drop over 1HSep. But as DRAM makers continue to increase their production output, the unsold chips will most likely end up in the spot market, which will most definitely further impact the spot market.

Cash flow level will decide how well manufacturers weather the market downturn

The plummeting DRAM prices have further widened the losses of relevant DRAM players. Although the capacity output of the new DRAM fabs remain unchanged, the diminishing cash flow caused by the persisting losses have rendered DRAM vendors unable to afford any new plant constructions. According to DRAMeXchanges 2Q07 survey, Samsung topped the list in terms of cash flow. Powerchip was ranked No.1 among Taiwan manufacturers, due to its GDR issuance in 2006. Micron also raised USD 1.1 billion worth of convertible senior notes, increasing its cash flow to USD 2.9 billion. Thus, to weather the market downturn, DRAM manufacturers must not only further enhance their manufacturing process, the securing of a sufficient amount of cash flow is just as important.

About DRAMeXchange

DRAMeXchange is a global leading provider of market intelligence, in-depth analysis reports and consultant services on major electronics components. Our company consists of 2 major research divisions---DRAMeXchange and WitsView, which cover the DRAM, NAND Flash, PC and display research sectors. You can learn more about DRAMeXchange by visiting www.dramexchange.com.

In the year 2000, the company started to deliver market intelligence services under the name of DRAMeXchange technology. This included the current business environment, real-time spot trading prices, market trends, capital spending and wafer capacity trends, the impact of DRAM/flash memory products on the market, and other relevant PC industry information.

To further expand its research, DRAMeXchange acquired LCD research institute WitsView in 2006 to provide insights on the display industry.

About WitsView

WitsView is a subsidiary brand of DRAMeXchange, which provides prompt and credible market insights covering the quantitative pricing trend for both TFT-LCD panels and finished goods, industry updates and market intelligence. Founded in 2004, WitsView Technology Corporation is made up of a group of sophisticated industry analysts with years of experience, providing objective and strategic insights on the display industry. Additional information can be found at www.witsview.com.

웹사이트: http://www.DRAMeXchange.com