2H’Oct. DDR3 2GB 'average' contract price declined 14.3 percent; 30 percent decline likely in 4Q10

TAIWAN: According to DRAMeXchange , the research department of Trendforce, the 2H’Oct. contract price indicated record high decline within a year that DDR3 2GB “Average” contract price dropped 14.3 percent to $27 from $31.5 while “low” contract price even declined 15.2 percent to $26.

In September, DRAM vendors expect Oct. DDR3 2GB average contract price can sustain in the level of $30, but we have seen the price cut from some DRAM vendors is unable to boost the demand effectively. This situation resulted in the sharply price decline in 2H’Oct. DDR2 contract price decline along with the DDR3 and current price negotiation has been completed based on the same price level as DDR since DDR2 portion in spot market is less than 10 percent.

In the spot market, short-term inventory replenishment happened after China National Holiday. DDR2 1Gb eTT chip rose to $1.86 and soon declined 8.6 percent to $1.7. DDR3 ship slightly declined 5.8 percent to 1.62.

Spot market has shown less volatility than contract market since DDR2 portion is higher in spot market than contract and price decline is comparably mild given the limit output. DDR3 market also indicated the low supply and low demand as well.

Despite of outperformed September NB shipment, yet overall quarterly growth is merely 2.6 percent since the traditional hot season sale is not satisfactory. In DRAM output side, Samsung’s output growth will reach peak at 3Q10 given the outperformed technology node and early immersion scanner settlement. Samsung also recorded good performance in terms of 3Q10 revenue.

Other DRAM vendors will sharply increase their output in 4Q10 given the immersion scanner settlement in 2H10 that they tend to offer lower price to buyers due to the pressure of sales under over-supply situation. Those factors combined have resulted in the acceleration of price decline in 2H’Oct. contract price.

DRAMeXchange expects DDR3 contract price will likely be down 30 percent QoQ to $20 by the year end.