Taipei, November 25, 2008 --- According to DRAMeXchange, last week (11/18-11/24), DDR2 spot chip price hit historical low with DDR2 1Gb eTT price drop from USD 0.87 to USD 0.81, with a range of 6.9% and a 33.6% drop from the beginning of the Q4. DDR2 667 MHz 1Gb price dropped from USD 0.86 to USD 0.77, with a range of 10.5%, and 36.8% from the beginning of Q4. In the past, the original chips traded in the spot market were under strict testing process and enjoyed higher price comparing to the eTT chips, but now the price is lower than the eTT. This obviously shows that DRAM vendors are dealing with severe inventory pressure and oversupply still remains.
In the contract market, 2H November contract price fell below USD 10 and hit historical low, the average price of DDR2 667 MHz 1GB and 2GB modules were about USD 9.5 and USD 20 which dropped about 10%. From the beginning of Q4 to date, the price has dropped 30% and 26% respectively. While the PC market stepped into slow season from November conventionally and the total market demand declined sharply, the contract price may keep plunging but with limited range. What’s more is that along with the increasing shipment of Netbook, which might account for 50% and 30% of the 2009 NB shipment of Asus and Acer, the increasing of DRAM average content per box will be suppressed. The worsening environment and the Netbook issue mentioned above will delay the recovering of contract price.
With the DRAM market situation worsening and the severe oversupply, DRAM vendors are facing declining revenue and cash outflow. Whether funding privately, from technology parent, or even government, for DRAM vendors, the core competitiveness is still the key to survive. Even without the DRAM core process technology developing ability which Samsung, Micron, and Elpida have, the mass production and cost down skills still make the Taiwanese DRAM vendors the best allies. For example, the technology alliance of Elpida and PSC or Micron, Nanya, and Inotera, mainly built on the manufacturing ability of the Taiwanese DRAM makers. The future DRAM market will be like a tripod, the technology will be led by the Americans, Japanese, and Korean makers, and manufacturing will be done by the Taiwanese vendors. The cooperation between the technology parents and the manufactures will be closer. The Taiwanese vendors will play the key role of helping the technology parent vendors gain market share.