Intel’s 865 chipset will edge out DDR as mainstream in 4Q 06

[Apoptosis]

The ease of Intel’s 865 chipset will edge out DDR as mainstream memory in 4Q, Says DRAMeXchange

DDR2 price up momentum weakened but drop range sustained by seasonality Spot prices of DDR and DDR2 trended divergently last week with DDR trended upward while DDR2 headed south. Supply insufficiency of DDR sustains the price upward momentum but distributors’ DDR2 stock release pressured DDR2 pricing.

The continual technology transition to 90nm reduces supply of 256Mb DDR currently and prolongs the price upward trend. However, DRAMeXchange expects the ease of Intel’s 865 chipset should edge out DDR as mainstream memory in 4Q, thus weakening the present price fluctuation.

For DDR2, spot prices that were once rocket to new highs amid PSC’s previous price adjustment of eTT chips finally recessed as distributors start releasing stocks after making considerable profits. The growth of supply thus drags overall prices down last week. As we already observed growing tight supply signs at the DDR2 contract market, the setback of pricing should be limited though.


2HJul DRAM contract price update: DRAM grew across the board

The negotiation of DRAM contract prices in 2HJul was smooth as PC OEMs were cooperative in price settling and did not resist much regarding the limited price adjustment. Prices of DDR 512MB DIMM were able to maintain the price growth momentum amid the continual demand and supply recession and resulted in price premium over the same density DDR2 at both spot and contract market. DDR2 512MB 533MHz gained by 2.33%, or US$1, while the higher frequency 667MHz only kept flat. The flattish DDR2 512MB 667MHz quotes reflected the narrowing down price difference with 533MHz. DDR2 1GB 667MHz was also quoted flat at the meantime.

Tracking the contract prices negotiation in 1HJul, DRAM makers insisted to hold their quotes flat or just willing to accept 3% range of drop though most PC OEMs were aggressively lobbying for a 5-8% price reduction. The entire price negotiation prolonged amid the Independence Day at US.

Some chipmakers had to cut their DDR2 512MB 533MHz DIMM prices by 2-3% and able to kept DDR DIMM prices to grow at the same rate. Noted that the settled US$38 price tag for DDR2 512MB 533MHz in 2HJun was just the special offers for limited customers, the official quote thus able to close flat at US$38 while some DRAM makers did reduce their prices by US$1 to US$39 and some others managed to propose a slight raise.

Clear NAND Flash price trend only to arrive in August The current NAND Flash market is still managed to sustain the warming up demand but overall environment is still mist under uncertainties. Transaction volume of all density NAND Flash obviously trending upward but DRAMeXchange projects clear price indication will only emerge in August.

The mentioned tepid demand persisted last week with overall prices kept correcting to lower prices. Sequential price fall was kept at the range of 2-3% with 4Gb part able to counter price fall pressure most.
DRAMeXchange observes that demand has been warming up from July in compare with previous month’s sluggish transaction. Transaction volume is obviously trending upward, though the entire environment could hardly compare with previous year.

Although Samsung had raised its quotes in 1HJul with rival Hynix soon follow in 2HJul, the actual transaction deal was mostly traded lower prices than the quotes set as most buyers anticipate prices will drop further by late July. Overall demand environment is still constrain under the cautious outlook.

DRAMeXchange estimates the price trend of NAND Flash will only grow clear in Aug amid the anticipated stop of continuous price fall. Despite most marketers expect the high-density MP3 players from big names like Apple, SanDisk, Microsoft and Sony that about to roll out in 3Q will spur demand, the actual demand for memory card does not hint any meaningful price rebounding sign with demand staying at standard level only.

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 48000 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 http://www.DRAMeXchange.com