2H’Dec. DRAM contract price declined 10 percent to $0.9/1Gb; likely to reach the bottom around $0.8/1Gb in 1Q11

TAIWAN: According to DRAMeXchange, the research department of Trendforce, 2H’Dec. contract price continued the downward pattern that DDR3 2GB contract“ Average” declined 10 percent to $18($0.97/1Gb) from $20 ($1.09/1Gb). Contract “Low ”dropped 10.5 percent to $17 ($0.91/1Gb).

Despite the continuous migration and increased output, 2H’10 PC sales is still under expectation and PC content did not significantly increase in 4Q10 when DRAM price has declined 50 percent from the peak.

Hence, DRAMeXchange expects that the DRAM market will be in the over-supply in 1H10. However, we also expect DRAM price will bottom up from April and OEM will sharply level up the inventory level for June PC shipment and result in the rebounded DRAM price.

DRAMeXchange forecasts that DDR3 1Gb will likely be back to the level at $1.2-$1.3 in 2H’11. DDR3 1Gb price will be below $1 if the demand is worse than expectation and will force the vendors with bad cost structure to cut the capacity.

DDR3 1Gb will be back to $1.2-$1.3 after capacity cut. That is, DRAMeXchange expects DDR3 1Gb price will be below $1 for three to six months.

In the spot market, DDR2 raises along with DDR3, the medium price recover soon after slightly decline in the very short term. DDR2 1Gb 800Mhz is up 13.5 percent to $1.43 from $1.26 since one DDR2-support-only chipsets are released from the market and it enhances the demand for DDR2.

First-tier module house also raises the DDR2 price as well. From the long term speaking, the upward trend is for short-term and we expect DRAM price will still in the downward pattern with no obvious demand.