DRAMeXchange’s DXI index reflects the real-time DRAM production value, which not only accurately depicts the current health of the DRAM industry, but also serves as a leading indicator of DRAM makers’ future stock price trend. After undergoing several fine-tunings, a close tie is seen between the index and corresponding DRAM makers’ stock price/production value.
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DRAM spot prices shows a temporal stability in the week Dec 17-24 with eTT parts posted sequential gain while branded parts quoted stable. Contract price in 2H Dec is in line with expectation as holidays lulls consumption.
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Weak DRAM pricing trend in both spot and contract market persisted in the week Dec 10-17 amid generally soft demand. The downhill price trend in both market places is believed to maintain through the end of 2007. But for longer term prospect, DRAMeXchange foresees a possible price rebound in 1Q08 as some suppliers in Taiwan are expected to undergo annual equipment maintenance in this period.
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Spot market saw a rare price fluctuating scene last week. Although DDR2 512Mb eTT price once rose to US$0.83, closing price still fell from US$0.81 on 12/03 to US$0.79 on 12/10, a decrease of roughly 2.4%. Meanwhile DDR2 1Gb eTT saw the most rise this week with an increase in closing price from US$1.65 on 12/03 to US$1.83 on 12/10, an increase of roughly 10.9%. Branded chip price was relatively calmer compared to eTT price. DDR2 512Mb price rose from US$0.92 on 12/03 to US$0.95 on 12/10, an increase of roughly 3.2%. DDR2 1Gb price rose from US$1.96 on 12/03 to US$1.98 on 12/10, an increase of roughly 1.0%. From a market perspective, with current spot market inventory continuing at a high level and the fact that we are now entering traditional slow season, DRAMeXchange expects DDR2 512Mb eTT price to continue its decline this week. From last week’s price, although 512Mb dies continue to be main stream, because the growing demand for single 2GB modules and the relative cost advantage of 2GB modules over 1GB modules that are manufactured with 512Mb dies, it is easy to see that 1Gb dies is gradually becoming the mainstream market standard. This trend is more evident with the price fluctuation of DDR2 512Mb price and the increase of DDR2 1Gb price this week.
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Last week, the DRAM spot price continued with its weak market trend. Although the DDR2 price declined slightly, a stronger market demand appears to be emerging in underpinning the recent price level. The DDR2 512Mb eTT price dropped 1.2% from US$0.82 on Nov.26 to US$0.81 on Dec.03. DDR2 1Gb eTT price slipped 1.8% from US$1.64 on Nov.26 to US$1.61 on Dec.03. Branded DRAM DDR2 1Gb price dropped 2.41% from US$2.01 to US$1.96 on Dec. 03. It should be noted that the DDR2 512Mb eTT price last week had fell below the US$0.80 level reaching US$0.77 for a while, but subsequently returned to its current price level. According to the current market development, it is expected that the DDR2 512Mb eTT chip price will stay flat or slightly trend upwards to US$0.80.
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Weak pricing persisted as expected in the DRAM spot market in the week Nov 19-26 due to considerable amount of inventory, with branded 1Gb parts posted the sharpest fall on a sequential basis, according to DRAMeXchange. While further price down is projected in the spot market, the research firm foresees that contract price trend in 1H Dec will still subject to downward pressure. Regardless of how price trends, the firm noted that better-than-expected sales record in Black Friday (Nov 23) implies re-stocks activities ahead, which is a rare positive news for memory module houses by 2008.
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Similar to last week, the DDR2 price level continued to trend downwards. The DDR2 512Mb eTT slipped from US$0.95 on Nov 12 to US$0.93 on Nov 19, down by roughly 2.1%. A point worthy of paying attention to is the price of the DDR2 1Gb eTT, where it dropped from US$2.10 on Nov 12 to USD1.91 on Nov 19, down by roughly 9.0%. It can evidently be seen that the DDR2 1Gb ett spot price has slipped past the US$2.0 level. In terms of the market trend, although the DDR2 512Mb eTT price levels appears to have grown more stable, amid the sluggish demand and rapid price declines in the DDR2 1Gb eTT, the DDR2 512Mb eTT chip price may fall below the US$0.9 level.
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As projected by DRAMeXchange, the DDR2 eTT spot price slipped past US$1.0 last week. The DDR2 512Mb eTT declined from US$1.03 on Nov 5 to USD0.95 on Nov 12, down by roughly 7.7%. In the branded chip segment, the spot price dropped from US$1.13 on Nov 5 to US$1.06 on Nov 12, down by roughly 6.1%. As the low-price modules from branded manufacturers continued to influence the market, the DDR2eTT spot price was still unstable. Coupled by the sluggish demand and high inventory levels, the DDR2eTT chip price may fall below the US$0.9 level.
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The three major module vendors of Taiwan -- ADATA, Transcend, and PQI, each has different management policy and sales strategy. ADATA place equal emphasis on its own branding as well as OEM sales and aggressively develop FLASH products and expand its market share. Transcend excels in managing its branded products, creating new frontier within low gross margin. PQI focuses its attention on creating trendy product especially in the FLASH sector. Their difference in sales strategy yielded different financial results. DRAMeXchange will perform a multifaceted analysis of their management performance.
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Price of 512Mb eTT, that closed at US$1.05 on October 29 after a short-lived rebound, should head south towards US$1 point in near term, according to DRAMeXchange. While price volatility is still severe in the spot market, magnitude of price fluctuation in the contract market is relatively stable. DRAMeXchange projects that only limited price drop will be seen at the contract market during late 2007.
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