DRAMeXchange : Weekly Research : 【Market View】

【Market View】October DDR2 spot price rose 35%. Shortage will likely continue in November while US$3 chip price is the target.

Published 2009-11-04 (GMT+8)

October DDR2 spot price rose 35%. Shortage will likely continue in November while US$3 chip price is the target.

DDR2 1Gb eTT spot price rose about 84% to US$1.94 from US$1.05 at mid-July that October monthly average price has rose 35% while chip price has sharply increase to US$2.62 and cross the US$2 barrier. 1st-tier DRAM vendors such as Samsung, Hynix and Elpida aggressively migrate to DDR3 currently and foreseeable 50%~60% of total commodity DRAM will be DDR3 product. However, the DDR3 migration will result in the comparably less DDR2 production. In line with the conservative attitude from Taiwanese DRAM vendor and brokers that we expect the DDR2 spot price is likely to hike to US$3 due to the shortage in spot market.

2H’Oct. contract price rose about 14% while the “High” price is up 30% to US$42. According to DRAMeXchange, the severe DDR2 shortage and beyond-expectation PC demand has resulted in the huge gap at contract price negotiation. 1st-tier PC-OEMs have done the price negotiation for whole October even with the locking deal. Extra demand will be done with new pricing deal. In expense with the shortage, 2nd and 3rd tier PC-OEMs can’t purchase the sufficient volume and price deal is closed to the spot price. Despite of the “Average” price is recorded at US$36, but we have seen some deal is done above US$42. As for the DDR3 contract price, 2H’Oct. contract price has rose 9.68% to US$34 from US$31. We The DDR3 market remains stable, that is, we think the rising DDR3 price is due to the bundle sales offered by the DRAM vendors while DDR3 price is very closed to DDR2 in this kind of bundle sales. Moreover, we expect the Nov. Contract price will likely continue its upward pricing trend attributed by the DDR2 shortage.

Analysis for DDR3 migration

Given the rocket high DDR2 price, PC-OEMs have accelerated the DDR3 migration in line with the new Calpella platform supported by Intel and new platform from AMD. We expect the PC shipment with DDR3 will surpass those with DDR2 by the mid-2010.

Korean vendors have applied all DDR3 products to 50nm technology and around 10% of DDR3 will be produced with 40nm technology. Japanese vendors realize the technology gap that they will not only continue the die shrink to 6nm technology for DDR2 but also merely remain DDR3 2Gb product in 50nm. Also, they will accelerate the development speed on 40nm technology migration and plan to go mass production in 3Q10. American vendors will go mass production under 50nm technology in 4Q09 and 40nm technology will be launch at 3Q10. Inotera, the Micron’s partner, has announced the plan for launch 40nm technology in the mid-2010 if the yield rate condition is good. As for Nanya, 50nm technology timeline will be the same as Inotera since 68nm technology is applied to the production successfully. PSC is waiting or the 60nm technology from Elpida and will likely purchase immersion equipments for 50nm technology migration. ProMOS is aggressively negotiating the outsourcing business with Elpida besides the cooperation with TIMC. DDR2 chip will be the first main target while DDR3 will remain discussed. Wafer-in production will be scheduled to pull up to 60K from 40K next year.

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