DRAM capacity reduction needed to increase prices

[Apoptosis]

DRAMeXchange forecasts that DRAM capacity reduction by some makers will help bring some balance in 2H07

Taipei, 22 May 2007 --- According to the latest market report from DRAMeXchange, DRAM spot prices last week slipped more than 10%, as the market showed no increase in demand. Hovering between the USD1.35-1.50 level, the DDR2 512Mb (64Mx8) 667MHz eTT plunged to a low of USD1.32. DDR2 512Mb (64Mx8) 667MHz, on the other hand, dipped to a weekly low of USD1.50. By contrast, DDR chips maintained a more gradual price decline, where DDR 256Mb/512MB 400MHz saw a drop of roughly 3.5%. SDRAM prices remained flat, due to stable demand and supply mechanisms.

Amid the tumbling contract prices, DRAM makers are already experiencing a loss. Despite the already dismal prices, the continuing ramp up from DRAM makers are allowing OEMs to ask for further price cuts. With DDR2 512MB U-DIMM 667MHz now only at USD17.00, there are at least some signs of a price stabilization in 2HMay. Contract Prices are expected to drop less severely in 2HMay, as some manufacturers have already reflected the persisting downward price trend in their 1HMay quotes. Thus, the pricing levels in 2HMay may be relatively the same as in 1HMay.In light of the current oversupply, some DRAM makers are reducing their losses by transferring some of their capacity to other types of products. This should help partly alleviate the demand and supply imbalance.

NAND FLASH contract price（2HMay）

As the overall NAND Flash market demand has grown weaker, the contract price for the MLC device has slightly declined. On the other hand, due to a decrease in the supply of SLC devices, its contract price is experiencing an increase.

　 1HMay 1HMay 2HMay 2HMay 2HMay 2HMay
Unit: USD Hi Low Hi Low Hi change Low change
16Gb SLC 17.6 15 19 15.2 7.95% 1.33%
8Gb SLC 8.8 7.5 9.5 7.3 7.95% -2.67%
4Gb SLC 5.3 4 5.5 3.9 3.77% -2.50%
2Gb SLC 2.8 2.4 3 2.35 7.14% -2.08%
1Gb SLC 2.7 2 2.6 1.95 -3.70% -2.50%
32Gb MLC 31.2 28.5 29.4 29 -5.77% 1.75%
16Gb MLC 15.2 14 14.7 13.5 -3.29% -3.57%
8Gb MLC 7.8 7 7.5 6.7 -3.85% -4.29%
4Gb MLC 4.2 3.5 4 3.6 -4.76% 2.86%

Source：DRAMeXchange, May 2007

More information on the FLASH contract price is available on DRAMeXchange's web site at http://www.dramexchange.com/market/flashpricec_show.asp