TAIPEI, TAIWAN: DRAMeXchange projects that contract price for 1GB DRAM will range between US$21-25 and 2GB will fall between US$40-46 in 3Q. Spot price of 1GB, however, should only grow by 10-15 percent as inventory is relatively high. Price should peak during August and September.

Furthermore, DRAMeXchange analysts suggest that DRAM transaction remained slow in the spot market last week (6/10~6/16). With the reduction of both demand and supply volume, a mild decline in price is observed, but nevertheless, the price of DDR2 eTT 1GB still maintained in the US$2.10 range. DRAM spot prices are expected to have a mild consolidation in the near term, but the downside should be limited. DRAMeXchange believes spot pricing will grow steadily in 3Q.

In regard to the contract price negotiation in 2HJune, some OEMs have secured their supply through late June and other buyers will negotiate according to the market status. DRAM makers estimate a 2-5 percent price increase as supply cannot meet all demands. Nevertheless, some PC OEMs believe that lower quotes are likely to occur as chipmakers are entering their quarterly earnings report season.

DRAM price trend in both spot and contract market only posted a mild growth over the past month despite negative news such as blackout at Hynix Wuxi, China fab and Samsung reclaiming defective DRAM chips from customers. This signifies that the upward price momentum is limited.

DRAMeXchange analysts observe that OEMs are still housing a safe inventory level, and thus, DRAM makers are finding it hard to raise their quotes despite the critical supply condition. Also, given that OEMs are able to adjust their product mix in 1GB to 3GB memory, DRAM makers are experiencing difficulty in taking a strong stance over price negotiation.