TAIWAN: According to DRAMeXchange, the 2H’Nov. DDR3 2GB “Average” contract price declined 12 percent to $22 from $25, while “Low” contract price dropped 12.5 percent to $21.
In 4Q10, DRAM vendors continued increasing output supply, but PC demand is shrinking month by month. The over-supply has been accelerated, resulting in the deeper price cut from DRAM vendors at the purpose of inventory digestion. DRAM contract price has declined 30 percent QoQ in 4Q10, and we expect DDR3 1Gb contract price will decline around 40 percent in 4Q10.
Spot market is also under the low volume and declining price pattern. DDR3 1Gb eTT chip price dropped 5 percent to $1.32, but DDR2 1Gb eTT average price sustain in the stable level given the limited supply. Still, the DDR2 1Gb eTT price mildly declined to $1.44.
Due to the unsatisfactory yield rate from Taiwanese vendors, some low-yield rate or less than 1333Mhz DDR3 chip are raising in spot maket that the low-yield 1Gb eTT chip is closed to $1.
We expect that 1H11 DRAM market will be still over-supply. Facing the pressure on cost, those DRAM vendors who can’t lower the cost effectively will be struggling more. Samsung will strengthen leadership in terms of cost structure and market share given the raising CAPEX and 35nm migration. Samsung is expected to gain over 40 percent market share in DRAM and will still remain profit under dropping DRAM price.
DRAMeXchange expects DRAM price will likely go bottom up from the end of 2Q11 if the DRAM content can be boosted up from dropping DRAM price. $1-$1.2 can be reachable in 2H11. If not, DRAM vendors will accelerate the capacity cut for lower DRAM price.