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TAIPEI, TAIWAN: According to DRAMeXchange, during the week July 22-28, DRAM spot pricing sustained its stable trend with limited fluctuation.
The overall inventory at the spot market is still high. Despite the approaching traditional hot season, an absence of a critical demand recovery has led to a price discrepancy of approximately 20 percent between the spot and contract market.
A sluggish DRAM demand at the spot market are because of the listed factors:
* PC DIY market is exposed to severe pressure as demand has been suppressed by the consistently- growing NB demand alongside with larger memory content being installed per box (avg. at 1GB or 2GB).
* Subprime mortgage and inflation infect consumers' confidence and whittle down consumption power.
* Consistent expansion at DRAM makers, which the end market found no more excess capacity to digest the fresh output. Not only a possible bounce back is being curbed, but also ongoing price trend.
Except for Samsung, which still guides a 100 percent YoY bit growth, all major DRAM makers have scaled down their bit growth guidance, further cut capex or slow down new fab construction plan in order to get rid of the industry trough.
But as production continues to advance, a possible price rebound will only emerge if vendors cut output or quit the market, as present oversupply seems having no effective solution yet.
NAND Flash contract price review in 2H July The 2H July NAND Flash average contract price remains either stable or slightly declines. If compared to the great price fall in June, current price has shown more stabilization due to quarter-end strategic price-cut measures at the end of June.
In addition, Apple's 3G iPhone remains best-seller in the market after launch in mid July. This has encouraged NAND Flash price and started to stabilize the pricing trend. However, NAND Flash demand outlook still remains unclear and most buyers are careful with the inventory level when purchasing for stock.
We expect NAND Flash contract price to remain flat in the short term and is likely to gradually rebound with the coming peak period after mid-3Q08 accompanying with low price promotion on NAND Flash related products.
