DRAMeXchange sees DRAM 2HOct contract price slipping further but ETT spot price rebounds strongly

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2007-10-23 22:24

Taiwan--(뉴스와이어)--Bucking against the persisting price declines, the eTT spot price underwent a sharp increase last week (Oct/15-Oct/22), where the DDR2 512Mb eTT jumped 11.9% to USD 1.17. By contrast, minimal fluctuations were seen in the branded DRAM chip prices. According to DRAMeXchange, the price jump in the DDR2 eTT stemmed from the ongoing 70nm process transition by major suppliers, which resulted in a smaller production output. In addition, the prices were also buoyed by the strategic chip purchases from some buyers. Apparently, the latest spot price rebound was mainly due to an increase in market activity, and not the result of a rise in the end demand. Meanwhile, as the chip buying was mainly concentrated in the DDR2 eTT segment, it did not help drive up the branded chip prices. As for the near-term market outlook, DRAMeXchange believes a huge supply increase will be seen in the DDR2 eTT, rendering it to fall back to the USD 1 level.

Traditionally, October usually represents a period of strong PC shipments. However, as October also marks the quarterly end for Dell and HP, coupled by the weak DRAM pricing environment, the two SI giants are wary of permitting any component inventory increase. Although prices of the DDR2 UDIMM/SODIMM module contract prices slipped by 20% in 1HOct, it was still unable to stimulate demand in the contract market. Prices have thus slipped another 10% in 2HOct. Due to the continuing price declines in the contract market, it has helped raise the DRAM content per box. In the consumer-based NB market, 2GB of memory now accounts for nearly 60% of all NBs. If prices plummet further, the ratio may rise to 70%~80%.

From a cost analysis standpoint, Elpida, Samsung, and Hynix, who are at the forefront in the 70nm manufacturing node, manufactures only 20% of the 1Gb chip via the more advanced 70nm process. Even if the yield rate is further improved, and the fact that the fabs are already running at fully capacity, the total manufacturing costs (includes depreciation and testing) of the 1Gb will still entail a minimum of USD 2.7~USD 3.0, while 512Mb chips will require USD 1.7~USD 1.9. "With the capacity expansion of the 12” fabs already slowing down, and the 8” fabs being tasked to produce other types of chips, the 2008 DRAM bit growth is projected to decrease from this year’s 93% to roughly 50%. However, in terms of demand, as the 2GB content per box for consumer NBs and PCs will respectively reach above 70% and 60% by the end of 2007, the 2008 growth momentum will arise mainly from the corporate NB sector," says DRAMeXchange.

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.

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