TAIPEI, TAIWAN: Last week (Nov/19-Nov/26), prices of DDR2 maintained weak in the spot market as DRAMeXchange expected, DDR2 512Mb eTT dropped by 11.8 percent to US$0.82. Prices of the higher-density 1Gb eTT and branded parts, dropped by 13.6 percent and 18.2 percent respectively, at US$1.65 and US$2.01 in the same period.

Poor demand, coupled with faster-than-expected price drop of the same-specification eTT component and weakness in contract pricing, were the major reasons for the sharp price fall of branded 1Gb parts. "Price of 512Mb eTT part that drops below US$0.80 mark is very likely," said DRAMeXchange.

In the DRAM contract market, price of 1GB DDR2 667 module was averaged at US$20 in 2HNov, representing a 10 percent sequential drop. Citing present market condition, "the acute downward price pressure as seen in spot market and minimal procurement incentive among OEMs are major forces dragging prices down," noted DRAMeXchange. "As Christmas approaches, OEMs, who generally should have low incentive to re-stock, should prolong the price weakness in 1HDec," it added.

On the other hand, NAND Flash contract price roughly stayed flat due to the increasing chip demand in 2HNov. As the inventories of downstream makers reduced in 1HNov, some makers started to stock up chips for the year-end holiday sales after mid-Nov.

In light of the larger accumulated price drop starting from early Sep, the market expects the NAND Flash contract price to stabilize in the short term, especially as the year-end holiday sales approaches. However; "if the year-end holiday sales is better than original market expectations, the NAND Flash contract price could mildly decline in the coming traditional slack season," said DRAMeXchange.