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DRAMeXchange Index shows rebound signal

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CIOL Bureau
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TAIWAN: The DRAMeXchange Index, which measures the total DRAM output value, which not only accurately depicts the current health of the DRAM industry, but also serves as a leading indicator of DRAM makers' future stock price trend. After undergoing several fine-tunings, a close tie is seen between the index and corresponding DRAM makers' stock price/production value.

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On January 2, 2007, the index continued to drop, slipping from 4622 to 2975 on June 12, down by roughly 36 percent. Although rebounding by 13 percent to 3369 on August 21, it subsequently returned to its downward fall, declining 23 percent to 2606 on November 28. On December 6, it edged up by 1.3 percent to 2641, but fell again on December 17 to 2607. It can be seen that the index changes resemble a double bottom. On December 31, the DXI rose to 2661.5, an indication that the index may have likely reached the bottom and may begin to rebound.

After maintaining a downward fall for more than half a year, the trend appears to have momentarily stopped, and is currently undergoing a correction. Major DRAM makers, including PSC, Nanya and ProMOS, at the meantime, all see their stock prices hit new lows on November 28 and rebounded in similar manner. Recent stock price trends of these companies all show bottoming signs. DRAMeXchange Believes DRAM industry may rebound in Q1 2008.

Appendix

DXI (DRAMeXchange Index)

As DXI trend is closely in line with makers' stock price trend/production value, industry players are aware about the authority power that DXI delivers. Having the index under consistently amendments and tests, this is now the index that has a judging power over stock price trend of DRAM companies with high credibility.

The reason in why the DXI is so effective rests on the fact that it timely represents the global total DRAM production value. To form the index, DRAMeXchange sorts out mainstream DRAM chips from the market, estimates makers' monthly output and multiples the amount by the latest spot prices three times a day. DXI is a vital indicator for DRAM output value, delivering significant positive correlation rate of 97 percent with the combined monthly sales of global DRAM makers.

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