DRAMeXchange: November DRAM supply bit growth slowed down to 2.65%
TAIPEI, Taiwan - Dec. 13, 2005 - DRAM bit growth slipped to 2.65% in November, down from October's 10% sequential growth. DRAMeXchange believes DDR2 should continue to gain its place at memory market with desktop PC segment enjoying the cross over in 1Q06.
DRAM spot prices remained flat with slight drops over the week December 6-13 as some module houses and DRAM buyers showed stronger buying interests. NAND Flash, on the contrary, reported accelerated drops with high-density parts suffered most.
DDR 256Mb 32Mbx8 was traded from US$1.99 to US$2.0 while DDR 512Mb 64Mbx8 was stabilized at the range of US$3.82-$3.86. Spot price of 256Mb eTT (UTT) part was set near US$1.82-$1.83. DDR2 512Mb 64Mbx8 533MHz was down from US$3.9 to US$3.74 and NMB(non-major-brand) part was fixed at US$3.04.
DRAMeXchange observers stronger demand from China and USA markets with some module houses attempted to collect more eTT(UTT) chips from December 12. Hynix and Micron both received increasing inquires for DDR chips and demand for DDR2 512Mb 533MHz was also boosted accordingly.
Despite demand grew strong last week, spot prices for all densities of NAND Flash chips slipped in an accelerated pace. Prices for 1Gb dropped 3% at US$7.65; 2Gb dropped 3% at US$14.82; 4Gb dropped 4% at US$26.35, 8Gb dropped 5% at US$45.19 and 16Gb dropped 3% at US$79.2 on December 12.
November DRAM supply bit growth slowed down to 2.65%
DRAM production output bit growth in November slowed a slow-down trend at 2.65% only, versus to the approximate 10% bit growth in October. DDR production output in November has increased to 367.4 million in 256Mb equivalent, up from October's 328.8 million. DDR2 output, however, has slipped to 249.7 million units from October's 271.92 million.
The major factors come from (1) DRAM makers' significant 12-inch wafer capacity ramp up in July, which were encouraged by healthy price trends. However, noted that some have allocated more capacity to NAND Flash and other products after seeing prices drop that emerged in September. (2) DRAM makers started making adjustment on their DDR and DDR2 production mixture as the price of DDR2 512MB dropped sharply and even nose dived at 10% lower than the price of DDR 512MB. The output ratio that varies between DDR and DDR2 was kept within 10% as DRAM makers expect DDR2 demand will only pick up from late December amid the potential smoothened Intel chipset supply.
Content per box as DRAM price indicator in 1H06
DRAMeXchange expects DRAM supply bit growth will turn mild in 1H06, limited by the already full 12-inch capacity and some are still under pilot run production. Noted that the first two quarters are the traditional low season for DRAM with PC shipment believed to drop sharply, we expect the growth for content per box (memory density that equipped at each PC system) to serve as the only demand driver and as an element to held DRAM prices against massive drop. The current prices of DDR and DDR2 512MB modules are quoted even lower than a DDR 256MB module in January 2005. Such low prices should help stimulating PC OEMs to advance to higher density modules such as 512MB and 1GB.
DDR2 proportion to escalate at contract but not spot market
DDR2 penetration rate at contract market will continue on the rise with DDR2 comes to a cross over with DDR at desktop segment in 1Q06 amid the positive impact of the Intel chipset shortage that believed to be eased from 2HDec. Despite DDR2 is gaining its place at memory market, demand should be constrained with the listed factors.
AMD will only launch its DDR2-supported CPU after April 2006 and its DDR2-supported CPU rate should only reaches 25% of its total CPU shipment for desktop and notebook in 2Q06. Since AMD should ship a large proportion of its DDR2-supported CPUs to PC OEMs, limited positive impact should be posed on DDR2 demand at spot market. We believe DDR2 demand at spot market will only get mature until DDR2 667MHz becomes mainstream. Most end users comment that DDR2 533MHz has no much speed performance premium over DDR 400MHz and they could simply overclock DDR 400MHz to over 500MHz without upgrading the system to DDR2 533MHz. The major spot market players, module houses, also limited the growth as they are still conservative about DDR2 upon cost concern. The cost of a FBGA-packed DDR2 PCB is 30% higher than DDR's with related labor cost for module rework up to four times higher as well. We believe they would held their steps and wait for clear indications about the migration pace.
Memory cards and MP3P demands hold low-density NAND Flash price relatively strong
High-density (mainly 4Gb and above) NAND Flash parts drew most attraction during the first part of the week with MP3 players and memory cards makers as the main seekers. Demand shifted to low-density parts during the latter part of the week with demand coming from regions including Hong Kong, Singapore and Taiwan.
Our memory card retail chains checking indicate that NAND Flash prices have dropped by a continuous US$3-6 rate every month since October. As NAND Flash spot prices reached rocket-high levels over the week November 29-December 6, component prices were set even higher than product retail prices, thus discouraged OEMs' demand. With the NAND Flash spot prices dropped accelerated this week, the price drops had finally stimulated demand among vendors. However, we believe NAND Flash spot prices will continue to stay downward due to continuous retail price falls.
DRAMeXchange sees traders dumped inventories regardless of cost amid the worries of potential contract price drop and the upcoming increased supply from Korean chipmakers that about to be on board by this week. We observe contract prices for high-density parts are suffering larger drop while others maintaining stable by the time of publication.
Simply the best DRAM/FLASH price website ¡÷ DRAMeXchange.com