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1H’Febuary contract price reached the bottom; DDR3 average contract price remained flat and the session low price went up by 3%

15 February 2011 Semiconductors

1H’Febuary contract price reached the bottom; DDR3 average contract price remained flat and the session low price went up by 3%
According to DRAMeXchange, a research department of TrendForce, 4Q10 DRAM contract price declined 50% and reached close to the bottom. After spotted a shrinking decline in January, February contract price seemed certain to rebound. DDR3 2GB average contract price remained flat while the session low contract price increased 3.23% from $15.5($0.81/1Gb) to $16($0.84/1Gb). As for DDR3 4GB, session low contract price also shown an upward trend, increased 3.33% from $30($1.72/2Gb) to $31($1.78/2Gb). DDR3 spot price surged 20% before Chinese New Year. The impact from Sandy Bridge flawed chipset was limited. Flawed chipset will be replaced and manufactures are back on track with the shipping schedule. Corrected New Chipset will be shipped recurrently from mid February forward. Factors mentioned above were expected to stimulate a price rebound. DDR3 session-low contract price indicated an upward momentum and will benefit the rebounding price.
In spot market, the need to replenish inventory on Chinese New Year’s Eve spurred speculative buying and resulted in a 24% price increase in the 1333Mhz 2Gb chip to $2.27. The spot price continued to climb to $2.32 then followed by a mild decline. A mild decline eased the hesitation in spot market and expected to stimulate sales. With the release of 1H’February contract price, the indication of a price rebound will help stabilize DDR3 spot price.
2011:Strong demand for mobile DRAM and cloud computing
According to DRAMeXchange, a research department of Trendforce, 2011 worldwide PC growth rate will be 10% while 3.9GB will be the new DRAM content per box. With an increasing DRAM capacity, a concern of over-supply still exists. DRAM vendors are actively adjusting output ratio from commodity DRAM to mobile DRAM.  Application in smartphone and tablet PC are expected to double mobile DRAM demand year-over-year and content per box will be at least 1GB. Cloud computing service provided by Google, Facebook and others have shown a rocketed growth. Server demand is expected to stimulate an increase in average server content per box from 20GB to 32GB and server-basis DRAM growth rate is about 50% to 60%. On the other hand, the wide acceptance of 3DTV and Blue-Ray DVD triggered a demand for specialty DRAM. Graphic memory is another potential market and the discrete graphic card spectrum has increased from 512MB to 1GB. Also, the next generation game console is under development, and memory development and qualification is an ongoing process.
The industry is gradually diversifying from manufacturing mainly commodity DRAM to now manufacturing diversified products such as mobile DRAM, server-basis DRAM, specialty DRAM and graphic memory. DRAM vendors are actively trying to break away from the existing industry cycle and sustain a steady profit over time. 


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