DDR2 1Gb eTT to become mainstream in 2Q08

TAIPEI, TAIWAN: Last week (Nov/12-Nov/19), the spot price of DDR2 512Mb eTT dropped to $0.93, down by 2.1 percent, while the DDR2 1Gb eTT has slipped past the $2 level to $1.91, down by roughly 9 percent.

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, DRAMeXchange predicts the DDR2 512Mb eTT chip price may fall below the $0.9 level.

In the 1HNov contract market, the average price of the DDR2 667 1GB module closed at $22. With the spot price continuing to drop, and shipments already peaking during October, OEMs have not been placing too many orders, rendering the contract market to be even more sluggish in 2HNov. By looking at both the spot price and contract price, there is still a 10 percent price gap. Thus, DRAM makers are facing mounting pressures in the contract price negotiations for 2HNov.

"The price of one DDR2 1Gb eTT chip is roughly equivalent to two DDR2 512Mb eTT chips. Thus, a growing trend will be seen where the DDR2 1Gb eTT gradually replaces the DDR2 512 eTT. Meanwhile, the 2GB module will also become increasingly mainstream," said DRAMeXchange analysts. "From a DDR2 1 GB module standpoint, the chips need to be mounted only on one side, which can shorten the manufacturing time and save costs as well. With roughly 8 percent of the manufacturing costs saved, module houses would be more than willing in seeing the DDR2 1GB being increasingly adopted by the market."

In addition, with the scheduled release of Windows VISTA SP1 in 2008, it should further help drive up the overall demand for PC upgrades. Consumer notebooks and PCs that carry roughly 2GB of memory are likely to account for roughly 60~70 percent of the market share by the end of 2007.

As notebooks have less room for relevant memory upgrades, the use of a single 2GB memory module would be viable, as it can better meet Vista’s memory requirements. Amid the continued migration to 70nm process and production ramp up of the DDR2 1Gb, DRAMeXchange projects it to become the new mainstream memory size in 2Q08.