2HAug NAND Flash contract price affected by mixed market factors

TAIPEI, TAIWAN: The 2HAugust NAND Flash contract price remains flat for high density products, while mild rise for low density products since output portion based on 4Xnm & 3Xnm advanced process technologies increases and reducing output portion for low density products based on mature process technologies, says DRAMeXchange.

Meanwhile, NAND Flash suppliers’ low-capacity memory card shipment to the handset customers has a higher priority. Therefore, low density NAND Flash contract price for 2HAugust shows a mild rise pattern.

Despite the increasing output portion from advanced technology for high density MLC NAND Flash and weaker procurement demand for memory card and UFD customers in August, 2HAugust high density NAND Flash contract price still remains flat since hot season restock orders used in high-capacity handset and MP3 products will keep warming up in 3Q09, according to DRAMeXchange.

Fig. 1: 32Gb MLC NAND Flash contract price trendSource: DRAMeXchange, August 2009

Given the expected recovering restock demand from electronics system and memory card customers starting from September for China Holidays in early October and year-end hot season in US & Europe, the 3Q quarter-end effect and increasing output portion of 3xnm process technologies from most NAND Flash suppliers after August will partially offset the positive market factors.

DRAMeXchange states that the NAND Flash contract price may continue to partly demonstrate mild rise and partly stay stable in the short term under the interaction effect of positive and negative market factors.

Fig. 2: 16Gb MLC NAND Flash contract price trendSource: DRAMeXchange, August 2009

Kingston adjusts 2GB module up by 30pc leading to upward spot market pricing

TAIPEI, TAIWAN: According to DRAMeXchange, Kingston, the worldwide memory module leader, adjusted DDR2 2GB module to $23.5 from $20.

Currently, the most updated price is $26.5. This movement also lead to the upward pricing trend in spot market, resulting in the 32 percent rise in DDR2 1Gb 800Mhz to $1.45 from $1.10 in mid-July, while DDR2 1Gb eTT hiked 37 percent to $1.44 from $1.05 on July 15. DDR3 1Gb 1333Mhz also nearly reached 30 percent to $2.12 from $1.65 on July 15.

Kingston lowered 2GB module price to $20 from $23 for the sake of stimulating sales and smoothed inventory level with negative view toward DDR2. In July, Kingston reveals the concern toward DDR2 supply in 4Q09 given the boosting demand from PC-OEMs and aggressive transition to DDR3 by Elpida-most important DRAM supplier for Kingston. It is believed that Kingston is seeking to secure the DDR2 supply in 2H09 by re-financing to PSC.

DDR2 shortage is expected in spot market; 1Gb chips will likely to reach $1.5 and likely to go higher

Elpida, PSC and Nanya are regarded as the main suppliers in spot market accordingly. Elpida is said that their DDR3 wafer-in portion will be around 40 percent of total commodity DRAM while Nanya will apply Micron’s technology to produce DDR3.

However, DDR2 will remain the mainstream transaction target in spot market by the year end and DDR3 portion is estimated less than 10 percent. Therefore, DDR2 products will face shortage in spot market and $1.5 will likely to be achieved.

According to our survey about DRAM consumption, Kingston can be ranked in No. 2 place that consume more DRAM than Dell and Acer. Kingston has always retained good relationship with DRAM vendors.

In order to secure the DRAM supply, Kingston tends to be the angel to DRAM vendors when they are in troughs. Before 2008, around 50 percent of ProMOS shipment went to Kingston but that situation changed since ProMOS couldn't produce 1Gb chip afterwards.

With the expanded capability that Rexchip has, Kingston’s relationship with Elpida has gotten closer. Relatively high portions of Elpida’s output in PSC and Rexchip eventually went to Kingston. However, DDR2 in spot market will be influenced under the aggressiveness of DDR3 transition of Elpida.

DRAMeXchange expresses that in the beginning of this year, PSC worked hard negotiating with Kingston regarding to the bailout plans and the negotiation turns positive when $158 million ECB redemption plans are agreed by 96 percent of bondholders.

In 7/9, PTI declared to inject $17 million to PSC through Kingston. That is, total bailout funding for both PTI and Kingston amounted US$125M and the money is limited to the use of daily operation and debt payment. At the meantime, PSC will largely expand DDR2 capacity to meet demand from Kingston.

With the aggressiveness DDR3 transition of two major suppliers in spot market, Elpida and Nanya, PSC will become the other major supplier for Kingston given the expanded capacity.

Chinese notebook market is hot and crowded

TAIPEI, TAIWAN: Impact by low price netbook, traditional notebook face the pricing pressure in Chinese market. According to DRAMeXchange, Lenovo grabbed 30 percent market share and dominates in the ranking, while HP and Dell tapped No. 2 and No. 3 positions, respectively.

Taiwanese notebook brands have worked hard to penetrate into the market and now it turns out to be worthy that Asus ranks in No. 4 with limited share behind the top three vendors, while Acer shows the strong growing sales afterward.

Ranking of notebook branding companiesSource: DRAMeXchange

Given the feature of low price, light weight and mobility, netbook is attracting consumer’s attention in China that it resulted in the pricing pressure to traditional notebook. According to DRAMeXchange, Chinese consumers prefer 14” to 15.9” screen size, while pricing acceptance locates from RMB$5,000 to RMB$5,500. Nevertheless, 13.9” products are heating that small-size notebook products are more welcome to consumers.

In the market share ranking, Lenovo leads with 30 percent market share followed by Dell and HP with 15 percent and 13 percent, respectively. Asus ranks in No. 4 with 10 percent market share, Sony in 5th place and Acer positions at No. 6 with limited behind with 5 percent market share.

Compared wit the result of same period in last year, Lenovo maintained stable market share, while both Dell and HP shows a decline pattern. According to DRAMeXchange, Taiwanese vendors and Korean vendors are notably targeting with competitive pricing strategy and it resulted in the raising market share.

The average pricing acceptance for Chinese consumers locates at the range of RMB$5,000 to RMB$5,500 along with range of RMB$2,000 and RMB$2,500 for netbook. DRAMeXchange expects that the pricing pressure from netbook will impact on the traditional notebook since market share has been occupied by netbook given the apparent pricing gap.

According to DRAMeXchange, the Chinese notebook market scales to 12 million units last year and will be up to 15 million units in 2009.

NAND Flash contract price appears up and down with mixed market factors

TAIPEI, TAIWAN: The mainstream MLC NAND Flash contract price appears to go up and down with mixed factors that some suppliers slightly adjusted down 2-5 percent on some high-density MLC NAND Flash contract price to spur the demand since output portion of high-density products produced by more advanced process technologies (4xnm and 3xnm) is raised along with cost advantage.

In the meantime, output portion of low-density products produced by more mature process technologies declines and some suppliers mildly adjusted up 5~7 percent NAND Flash contract price on some low-density MLC chips, says DRAMeXchange.

Fig. 1 16Gb MLC NAND Flash Contract Price TrendSource: DRAMeXchange, Aug. 2009.

Despite of long-term restock orders from cellular and MP3 system customers in 3Q09, DRAMeXchange believes that memory card and UFD customers are still in the status of slow season in early August. However, the inventory replenishment for memory card and UFD products is expected to gradually recover staring from late August.

Some suppliers will slightly increase the wafer output in 3Q09 and most suppliers will gradually raise the output portion of 3xnm process technology after August. It will result in the pressure of upward pricing trend for high-density chips.

Combined with the above positive and negative market factors and quarter-end effect in coming September, DRAMeXchange expects NAND Flash market to roughly stay at a more balanced status in 3Q09.

Fig. 2 64Gb MLC NAND Flash Contract Price TrendSource: DRAMeXchange, Aug. 2009.

Nevertheless, NAND Flash suppliers will apply different pricing strategies depending on individual client base, order mix and process technology breakdown. Therefore, NAND Flash contract price may continue to demonstrate the mild ups and downs pattern or roughly stay stable in the short term.

Global DRAM revenue rises 27.1 percent in 2Q09

TAIPEI, TAIWAN: According to DRAMeXchange, with the production cut effect in DRAM contract price, PC system vendors continue to replenish their DRAM inventory under the low pricing status and resulted in the 23 percent growth contract price in 2Q09.

Given the tight supply, spot price also hikes that DDR2 1Gb 667MHz chip spot price once reached $1.27 in May and it was anticipated to reach $1.5 by the quarter end. However, it is said that a certain DRAM vendor released the low price chip to spot market that trigger the price fallen to the rage of US$1.05~US$1.19. Average price for DDR2 1Gb 667 MHz rose 27 percent to $1.12 in 2Q09.

The 2Q09 DRAM revenue rose about 10 percent~50 percent given the 23 percent growth contract price and 27 percent growth spot price. Samsung and Elpida have outperformed the market and increase 3 percent to their market share. Compared with the overall industry revenue in 1Q09, DRAM revenue for 2Q09 rose 27.1 percent to US$4,043M in 2Q09.

Global own brand revenue ranking for DRAM vendors
According to DRAMeXchange, 2Q09 DRAM revenue increased 27.1 percent. Samsung continued its unchallenged leadership in the DRAM industry with $1,179M DRAM revenue in 2Q09 while its market share has climbed 2.8 percent to 29.2 percent given the upward pricing trend in contract price, technology migration and raise DDR3 portion.

In 2Q09, Hynix's DRAM sales rose 31.5 percent to $928M given the 20 percent average price growth, 10 percent quarterly bit growth and dropping unit cost. Currently, Hynix ranks at the 2nd place and its market share has increased 0.7 percent to 22.9 percent.

Elpida recorded the dramatically 50.1 percent sales increase and strengthened its 3rd market leading position to surpass Micron given the 27 percent ASP growth and 12 percent bit growth.

For the different accounting period (2Q for Micron is March, April and May) it applied for the accounting periods, contract price still decline 2 percent compared with last periods (Dec., Jan. and Feb.).

According to DRAMeXchange, DDR2 1Gb 667MHz contract price was merely $0.88 in March while the contract price increased to $1.16 in June that the revenue upward pattern is less than other vendors. Therefore, Micron would grab 4th place in the ranking while its market share has declined to 13.6 percent in 2Q09 from 15.2 percent in 1Q09.

As for the Taiwanese vendors, Nanya ranks at the 5th position along with $230M DRAM revenue and 34.5 percent QoQ given the upward pricing trend in both spot market and contract market, and peaking utilization rate of outsourcing partner-Inotera.

Benefited from the 27 percent boosting spot price and 42 percent utilization rate from 25 percent, PSC shows the amazing 38.1 percent revenue growth in 2Q09 and its market share has slightly increased.

Winbond announced its 2Q09 DRAM revenue at $80m with merely 8.6 percent QoQ. The market share has declined to 2 percent since growth momentum is comparably weaker than the market. ProMOS also demonstrates 20.9 percent QoQ revenue pattern with the upward pricing trend as well.

Fig. 1: 2Q09 WW DRAM revenue ranking, by own brand DRAM revenue
(Company revenue includes outsourced portion and excludes the sub-manufacturing revenue)Source: DRAMeXchange, Aug. 2009

*Qimonda did not announce any financial results in 2Q09 under the stage of bankruptcy.; Unit: Million USD

Note:
Fig. 1: For Samsung 2Q DRAM revenue , we approximately derived the resulted by deducting LSI revenue from semiconductor based on the assumption that DRAM revenue accounts for 48.3 percent in memory sectors and 2Q09 average exchange rate is $1 against KRW$1,283. We apply this estimation to other vendors by indicating 71 percent for Hynix total revenue, 49.8 percent for Micron, 89 percent for PSC, 90 percent for ProMOS, 94 percent for Nanya and 80 percent for Winbond under the following exchange rate: US$1 against NT$33.09, US$1 against JPY$97.41.

Own brand market share of global DRAM industry (By country)
The Korean vendors share rose 3.5 percent to 53.4 percent compared with 1Q09 and their leader position remained unchallenged in 2Q09.

Shares from the Taiwanese vendors slightly rose to 13.8 percent in 2Q09 from 13.5 percent in 1Q09. The rest of market share is occupied by Japanese vendors(18.9 percent) and American vendors (13.9 percent), as per Fig. 2.

Fig. 2 The market share of own brand DRAM revenue, by countrySource: DRAMeXchange, Aug. 2009

2Q09 branded NAND Flash makers sales rose 33.6pc QoQ to $2.786bn

TAIPEI, TAIWAN: Benefited from NAND Flash suppliers’ production-cut effect and restock demand from emerging market, NAND Flash ASP rose about 20 percent QoQ in 2Q09.

Total branded NAND Flash shipment increased about 10 percent QoQ and it resulted in the overall branded NAND Flash makers’ revenue improvement in 2Q09. 2Q09 branded NAND Flash makers’ total sales increased 33.6 percent QoQ to $2.786bn from $2.086bn in 1Q09.

According to the ranking, Samsung remains its leadership place with 37.2 percent market share and records $1.037bn revenue, followed by Toshiba with 34.5 percent market share and $960mn revenue.

Hynix ranks No. 3 with 10.3 percent market share and $288mn revenue, while Micron takes the No. 4 seed with $236mn. Intel and Numonyx grab No. 5 and No. 6 with $193mn and $72mn, respectively.

Benefited from the inventory replenishment from mobile market, NAND Flash shipment slight increased with raising ASP in 2Q09. Samsung’s 2Q09 revenue was up 38.3 percent QoQ to $1.037bn, while the 2Q09 market share climbed to 37.2 percent from 36 percent in 1Q09.

Toshiba maintained lower utilization in 2Q09, but quarterly sales increased 29.7 percent QoQ to $960mn because of the enhancing ASP. The 2Q09 market share is slightly down to 34.5 percent from 35.5 percent in 1Q09.

With boosting 23 percent QoQ ASP and 40 percent QoQ shipment, Hynix’s sales significantly rose 68.4 percent QoQ to $288mn in 2Q09. The 2Q09 market share is up to 10.3 percent from 8.2 percent in 1Q09.

Micron and Intel camp demonstrated the upward shipment pattern with lower ASP in 2Q09. Micron’s sales rose 18 percent QoQ to $236mn with 8.5 percent market share in 2Q09. Intel recorded $193mn revenue with 24.5 percent QoQ growth rate and 6.9 percent market share in 2Q09.

Numonyx recorded $72mn revenue with 2.9 percent QoQ despite of mild shipment decline and slightly raising ASP in 2Q09. Numonyx market share in 2Q09 is about 2.6 percent.Source: DRAMeXchange

2H’July mainstream MLC NAND Flash contract price declines around 4pc

TAIPEI, TAIWAN: 2H’July mainstream MLC NAND Flash contract price slightly declined around 4 percent since customer base and demand varied during the period and resulted in the mild downward pricing trend, says DRAMeXchange.Source: DRAMeXchange

July is traditionally regarded as the slow season for memory card and UFD. Since demand for inventory replenishment seems to be weak and cost competitiveness proved due to technology migration, vendors tend to stimulate the purchase willingness with favorable price.

However, some vendors receive the order request for peak season from system customers in 3Q09 that they prefer to remain the stable price so that they can keep certain of profit on hand. That is, contract price for 2H’July remains the flat, according to DRAMeXchange.

Despite slow season pattern for NAND Flash main application product will continue till mid-August and NAND Flash vendors receive orders from electronic system customers.

The mix effect will indicate the mild pricing fluctuation that different product mix, variable supply status and business development will resulted in different pricing strategy.

DRAMeXchange believes that the mix of ups and downs will continue till mid-August that short-term NAND Flash contract price will demonstrate a less volatile pricing trend.Source: DRAMeXchange

2H’July contract price for DDR3 rose 9pc to $24

TAIPEI, TAIWAN: According to DRAMeXchange, resulting from the 5 percent upward pricing in term 1H’July, DDR3 contract price for 2H’July hikes again due to tight DDR3 supply and aggressiveness in inventory replenishment for PC-OEMs.

Most DDR3 2GB price deal are negotiated at $24, while Samsung’s pricing was sustained at $22/2GB in 1H’July and was adjusted to $24/2GB in 2H’July.

“Low” price of DDR3 2GB rose 9 percent to $24, and the “Average” price just merely increased to $24.5 from $24, but not much deal was done for "High" price.

The main reason for upward pricing trend is triggered by higher premium on extra DDR3 requirement for PC-OEMs. It is indicated that PC-OEMs pay 7 percent premium on the extra volumes. 2H’July DDR2 contract “Low” price and “Average” price rose around 5 percent since DRAM vendors applied “bundle-sales” strategy to promote DDR2 along with DDR3 despite of weak demand in DDR2 market.

Unlike the boosting upward trend in contract market, DDR3 1333Mhz 1Gb chip rose 9 percent to $1.7 from $1.56 at 1H’July in the spot market given the rare DDR3 supply in the spot market. DDR2 still remains the main transaction target and DDR3 exposure is less than 1 percent among the product mix of module houses.

According to DRAMeXchange's analysts, the boosting demand for DDR3 is triggered by aggressive DDR3 migration of Acer. It is estimated that around 70 percent of notebook shipments in Q4 will be equipped with DDR3 modules.

Acer looks forward to take advantage of DDR3 migration to achieve higher market share in terms of PC shipments. HP and Dell are forced to raise the DDR3 exposure in 2H’09 in advance to protect their leadership even though they plan to adopt DDR3 in mainstream NB market next year. It resulted in the huge demand for DDR3 in 2H’09.

However, DRAM vendors are cautious toward the DDR3 migration since they don’t want to record bigger loss again with anxious migration plans. Therefore, DDR3 contract price rose 14 percent in July due to tight DDR3 supply.

It is indicated that around 30 percent ~70 percent PC models in Q4’09 will be equipped with DDR3, while DRAM vendors are required to speed up the migration process by PC-OEMs.

Korean vendors such as Samsung and Hynix demonstrate their competitiveness in terms of migration speed and production capability. Not only with penetration in 50nm technology, Samsung and Hynix will adopt 40nm technology to produce DDR3 in 2H’10.

DDR3 will be amounted 35 percent ~40 percent in terms of wafer-in production in Q4’09. On the other hand, Elpida is much aggressive toward DDR3 compared with Korean vendors. DDR3 wafer-in production portion will be estimated as 50 percent of total DDR2 production along with DDR3 in Q4’09.

To enhance the competitiveness during the periods without 50nm technology, Elpida is developing 60nm technology to produce DDR3 chip that production volume will raise 20 percent under 60nm technology without immersion facility. As for Taiwanese vendors, Nanya/Inotera currently apply Qimonda’s 70nm technology to produce DDR3 while Micron’s 68nm technology and 50nm technology will be mainly adopted to produce DDR3 followed by the migration plans in 2H’09.

That is, DDR3 portion in Fab 3A will be obtained to 90% if Micron’s technology is applied in 90 percent of total production in Fab 3A. Rexchip ramp up DDR3 production in small volume while PSC will decide to follow depends on the spot market status.

Global DDR3 Migration Trend (Percentage of commodity DRAM production)Source: DRAMeXchange, July 2009

Global semicon mid-year review: Chip market revival or blip on stats radar screen?

A recent report from Future Horizons suggests an 18 percent growth for the chip market in Q2-2009! So, is this a sign of the chip market recovery or a mere blip on the statistics radar screen?

It is both, said, Malcolm Penn, chairman, founder and CEO of Future Horizons, and counselled that: "The fourth quarter market collapse was far too steep -- a severe over-reaction to last year's gross financial uncertainty -- culminating with the Lehman Brothers collapse in September. The first quarter saw this stabilise with the second quarter restocking, but there are other positive factors also in play."

Examining a bit further, here's what he further revealed. One, the memory market is seeing some signs of slow recovery. He said, "This has already started DDR3 driven!" Likewise, companies are also in the process of revising their forecasts. The reason, Penn contended, being, "The maths has changed dramatically since Jan 2009!"

According to him, factors now leading to conditions looking up in H2 2009, include the normal seasonal demand -- from a tight inventory base -- and tightening capacity. There is also a clear indication of the correction phase to rebalance over-depleted inventories having started. "This is what's driving Q2's high unit, and therefore, sales growth," he contended.

Firms advised to stop seeing and waiting!
This isn't all! Penn further counselled firms who are still in a wait-and-see mode to 'stop seeing and waiting'! Next, fabs are also looking to maximize their returns. For one, they have stopped over-investing.

Do we have enough stats from others to back up what's been happening in the global semiconductor industry? Perhaps, yes!

IC Insights stands out
First, look at IC Insights! It has stood out by pointing out in early July that H2-09 is likely to usher in strong seasonal strength for electronic system sales, a period of IC inventory replenishment, which began in 2Q09, and positive worldwide GDP growth.

IC Insights has predicted global IC market to grow +18 percent; IC foundry sales to grow +43 percent; and semiconductor capital spending to grow +28 percent in H2-09.

DDR3 driving memory recovery? Flat NAND?
Elsewhere, Converge Market Insights said that according to major DRAM manufacturers, DDR3 demand has been on the rise over the last two months and supply is limited.

This is quite in line with Future Horizons contention that there is a DDR3 driven memory recovery, albeit slow. It would be interesting to see how Q3-09 plays out.

As for NAND, according to DRAMeXchange, the NAND market may continue to show the tug-of-war status in July due to dissimilar positive and negative market factors perceived and expected by both sides. As a result, NAND Flash contract prices are likely to somewhat soften or stay flat in the short term.

Semicon equipment market to decline 52 percent in 2009!
According to SEMI, it projects 2009 semiconductor equipment sales to reach $14.14 billion as per the mid-year edition of the SEMI Capital Equipment Forecast, released by SEMI at the annual SEMICON West exposition.

The forecast indicates that, following a 31 percent market decline in 2008, the equipment market will decline another 52 percent in 2009, but will experience a rebound with annual growth of about 47 percent in 2010.

EDA cause for concern
The EDA industry still remains a cause for concern. The EDA Consortium's Market Statistics Service (MSS) announced that the EDA industry revenue for Q1 2009 declined 10.7 percent to $1,192.1 million, compared to $1,334.2 million in Q1 2008, driven primarily by an accounting shift at one major EDA company. The four-quarter moving average declined 11.3 percent.

If you look at the last five quarters, the EDA industry has really been having it rough. Here are the numbers over the last five quarters, as per the Consortium:

* The EDA industry revenue for Q1 2008 declined 1.2 percent to $1,350.7 million compared to $1,366.8 million in Q1 2007.
* The industry revenue for Q2 2008 declined 3.7 percent to $1,357.4 million compared to $1,408.8 million in Q2 2007.
* The industry revenue for Q3 2008 declined 10.9 percent to $1,258.6 million compared to $1,412.1 million in Q3 2007.
* The industry revenue for Q4 2008 declined 17.7 percent to $1,318.7 million, compared to $1,602.7 million in Q4 2007.

Therefore, at the end of the day, what do you have? For now, the early recovery signs are more of a blip on the stats radar screen and there's still some way to go and work to be done before the global semiconductor industry can clearly proclaim full recovery!

Before I close, a word about the Indian semiconductor industry. Perhaps, it needs to start moving a bit faster and quicker than it is doing presently. Borrowing a line from Malcolm Penn, the Indian semiconductor industry surely needs to "stop waiting and watching."

I will be in conversation next with iSuppli on the chip and electronics industry forecasts. Keep watching this space, friends.

1HJuly mainstream MLC NAND Flash contract price slightly drops 1-5pc

TAIPEI, TAIWAN: End-customer’s purchase willingness in early July is cautious since July is traditionally regarded as the slow season for NAND Flash main products such as memory card and UFD.

Inventory level for some card makers is still above one month. NAND Flash vendors slightly lower mainstream MLC NAND Flash contract price to enhance the purchase volume. Therefore, 1HJuly contract price of mainstream MLC NAND Flash slightly decreased 1-5 percent, says DRAMeXchange.

The 16Gb MLC average contract price has dropped 7 percent to $4 in 1HJuly from $4.3 in May, while 32Gb MLC average contract price has decreased 12 percent to $6.64 in 1HJuly from $7.56 during the same period.

The 32Gb MLC contract price showed the bigger downward pricing trend since most vendors already migrated to more advanced process technologies to produce high-density products. Therefore, price cut in promotion for 32Gb MLC was larger than 16Gb MLC over the past two months, according to DRAMeXchange.

Benefited from hot sales of iPhone 3GS and the new smartphone models launched, NAND Flash suppliers eagerly seek to increase the shipment portion of electronic system maker customers in their product mix to ease the slow season effects by memory card and UFD to improve profitability and stabilize market price.

On the other hand, end-customers urge suppliers to further offer some price discount to help them stimulate the market demand in light of the slow season effect, higher inventory level at hand and cost-down efforts of suppliers’ process technology upgrade.

Buyers and suppliers have different opinions toward the short-term market view and pricing trend and inventory replenishment for year-end hot reason is expected to warm up in August.

The NAND market may continue to show the tug-of-war status in July due to dissimilar positive & negative market factors perceived and expected by both sides. Therefore, the NAND Flash contract price is likely to somewhat soften or stay flat in the short term.Source: DRAMeXchange

DDR3 July contract price likely to rise 5~10 percent

TAIPEI, TAIWAN: The June contract price did not fluctuate since some contract deals between PC OEMs and DRAM vendors are conducted either in monthly basis or quarterly basis. DRAMeXchange believes that DDR3 contract price in July will increase 5 percent~10 percent due to the aggressive CULV promotion and new contract deal negotiation in July.

As for spot market, given the stable range between $1.5~$1.7 of DDR3 1Gb chip with 50 percent premium compared to DDR2 1Gb chip, DDR2 1Gb chip price has dropped to $1 from $1.34 in May, says DRAMeXchange.

From the supply side perspective, DRAM vendors adopted the “Capacity Cut” strategy through the difficult period in 2H’08 given the frozen demand and global financial crisis. Qimonda was filed bankruptcy early this year, while ProMOS maintained the minimum operation.

With the improved economy, DRAM vendors gradually enhance production. DDR3 wafer-in portion is expected to be up to 30 percent in Q4’09 from 15 percent in Q1’09, while Korean and Japanese vendors demonstrate the great ambition on the DDR3 migration.

Nanya and Inotera are the only capable Taiwanese vendors that can dedicate to DDR3 production. However, the DDR3 portion of Nanya and Inotera is below 10 percent, while the remaining 90 percent is occupied by Korean and Japanese vendors (see Fig. 1).

DRAM vendors were suffering from the big financial trough in the downturn economy crisis that this circumstance resulted in the obvious CAPEX gap especially in DDR3 migration. This situation is way different from what DRAM vendors devoted CAPEX in 70nm and 65nm technology. As for Korean vendors, they do aggressively conduct not only DDR3 migration, but 50nm technology adoption as well.

It is expected that at least 70 percent DDR3 chips will be produced with 50m technology. 65nm remains current mainstream technology for Japanese vendors that they do contend competitiveness if the total chip amount can be increased via “Die Shrink” process.

Although Qimonda’s 70nm technology is still adopted to produce DDR3, Micron’s 68nm and 50nm technology will be mainly applied in 2H’09. This technology migration will give Nanya and Inotera some credit to compete with Korean/Japanese vendors. Meanwhile, Powerchip and Rexchip are both qualified for mess production, according to DRAMeXchange (see Fig. 2).

Mainstream MLC NAND Flash average contract price flat in 2H June

TAIPEI, TAIWAN: Mainstream MLC NAND Flash average contract price stayed flat or slightly declined in 2H June due to the interaction of quarter-end, slow reason and new smart phone launch effects. Therefore, recent NAND Flash market showed consolidating status, says DRAMeXchange.Source: DRAMeXchange

Upstream & downstream NAND Flash related makers intend to lower their inventory level by the end of June. Moreover, June and July remain the traditionally slow season for NAND Flash’s major applications such as memory card and UFD.

Meanwhile, NAND Flash cost has largely increased in 1H09. Both leads to the purchase hesitation for memory card and UFD makers in June. Memory card makers urge NAND Flash suppliers to offer some price discount in order to stimulate the demand in slow season.

Thus, some NAND Flash suppliers slightly cut price to help increase clients’ procurement volume. Therefore, contract price for some products slightly declined in 2H June.

With the exciting sales figures of new iPhone 3GS and other new smartphone launch to the market, some NAND Flash suppliers will benefit from these system maker customers’ restock demand in 3Q09.

Some NAND Flash suppliers thus can maintain the stable pricing policy and help improve the profitability. DRAMeXchange is confident that contract price for certain products stayed flat in 2H June.

Given the fact that more new smartphone will launch in 3Q09, 3G cellular phone upgrade demand in China market and U.S. economy expected to gradually recover in 4Q09 will help revive the year-end holiday sales, demand for NAND Flash related products is expected to gradually improve quarter by quarter in 2H09.

However, in light of the NAND Flash demand is expected to further improve in 2H09, DRAMeXchange expects that some NAND Flash suppliers to slightly increase their output in 2H09 according the latest market consumption status.

Considering that, DRAMeXchange believes that NAND Flash market to stay at the more balanced supply/demand status in 3Q09. As the slow season effect and the new product launch effect both will affect the NAND Flash market after the 2Q quarter-end period, DRAMeXchange predicts that NAND Flash contract price to stay flat or slightly soften in July under the tug-of-war effect of positive & negative factors.

SSD penetration rate in standard NBs to be about 1.5pc in 2009

TAIPEI, TAIWAN: Solid State Drive (SSD) has been the killer application in NAND Flash market due to higher content per system consumption and more popular applications.

According to DRAMeXchange, SSD market penetration rate in standard NB (notebook) market will be estimated to be 1~1.5 percent in 2009 and will be below 10 percent in low-cost-PC segments since HHD is still adopted as the mainstream storage devices.

Higher price has stumbled the extensive application and deeper market penetration for SSD. Given the fierce upward pricing trend for 16Gb and 32Gb in 1H09, extensive market acceptance for SSD has been postponed due to the higher cost and profit margin decline. Demand is estimated to be less optimistic compared to the previous forecast in 2009, says DRAMeXchange.

SSD application can be briefly divided into two categories- “PC” and “non-PC”. As for penetration rate in PC market, the ratio of NB-used SSD and low-cost PC-used SSD has kept declining and resulted in the sloppy overall SSD shipments. SSD costs over four times higher than HDD regarding to the cost per GB while software and storage compatibility still remain the concern toward PC vendors.

PC vendors are more cautious and conservative toward SSD development even though Microsoft has made some adjustments for SSD optimal application in the brand-new Windows 7. NAND Flash price is expected to be much lower when 3X nm/2xnm node turn to the mainstream process technologies and SSD will be more popular in the market.

NAND Flash price remains flat due to quarter-end effect, slow season

TAIPEI, TAIWAN: NAND Flash market has remained stable since the beginning of June. As for demand side, the market has not fully recovered and end-product sales are perceived weak, says DRAMeXChange.

The launch of new generation iPhone is expected to have some positive impacts on the market and other cell phone vendors also introduced series of high-end smartphone at the same time. That is, the demand from cell phone system customers has been highlighted.

However, demand from other main application such as memory card and UFD still remain weak due to the floppy end-user demand and quarter-end effect along with the inventory adjustment. Therefore, the downstream clients are more conservative toward the purchase and would rather postpone the spending.

NAND Flash price has reached the chip cost level and vendors look forward to seeing their favorable price in the future so that they can show the profitability figures.

On the other hand, customers are reluctant to see the weaker demand trigger by increasing cost and unaffordable product price especially for the future star product -- SSDs. We believe the short-term NAND Flash contract price will remain flat under the dynamic environment such as quarter-end effect, traditional slow season and new products launch, according to DRAMeXchange.

iPhone 3G S launch will help stabilize NAND Flash price in slow season

TAIPEI, TAIWAN: NAND Flash contract price showed up and down in 1HJune, while the contract price for mainstream high-density MLC chips slightly declined 1 percent to 6 percent due to the slow season and quarter-end effects, says DRAMeXchange.

Source: DRAMeXchange

The period of May-July is traditionally regarded as the slow reason for NAND Flash related products such as memory card and UFD. Therefore, the market demand is comparably weak. Given the over one month inventory level along with the quarter-end effects, memory card makers show less incentive in NAND Flash re-stocking.

On the other hand, NAND Flash suppliers offered price discount to customers during Computex Taipei Show in early June. It’ll help downstream clients to engage in sales promotion in slow season. Therefore, it resulted in the slightly price decline trend in mainstream MLC contract price.

Source: DRAMeXchange

DRAMeXchange states that currently NAND Flash suppliers still will try to stabilize price during NAND Flash slow season in order to improve their profitability. However, price is expected to be influenced by the quarter-end effect and weaker demand in slow season.

Apple officially introduced new iPhone 3GS on June 8 and new iPhone will hit the American market on June 19 and gradually deliver to other countries in the near future. The pricing for 16GB model is US$199, US$299 for 32GB model and US$99 for 8GB iPhone 3G.

The launch effect is expected to have positive impact on NAND Flash market despite of about 5 percent consumption of total NAND Flash demand in 2H09. Given these positive and negative factors to NAND Flash market, NAND Flash contract price is likely to slightly soften or stay stable in the short term.

The contract price is expected to stabilize and gradually rise when the re-stock demand can gradually recover in the traditional hot season.

Shipments of iPhone 3GS above 9 million for 2H09

TAIPEI, TAIWAN: Apple just announced to launch new iPhone model “iPhone 3G S”. DRAMeXchange forecast the shipment will be above 9 millions for 2H09 but the achievement is deeply relied on the consequence of cooperation deal between Apple and international operators.

New iPhone NAND Flash consumption will be 162 million GB based on the assumption of 16GB to 20GB average content and 9 million shipments in 2H09. The launch of “iPhone 3G S” will have some positive impact on NAND Flash market even though the consumption merely accounts for 4.7 percent of total out in 2H09.

The first quarter sales of “iPhone 3G S” is unlikely to surpass the around 7-million-sales scale of “iPhone 3G” if the launch timing and competitive smartphone market have been taken into consideration, says DRAMeXchange.

Some global cellular phone giants such as Nokia, Samsung, Sony Ericsson and LG have introduced various smartphone with touch screen function during the past years. Original smartphone companies RIM, Palm and HTC also fight back with Black Berry Storm, Palm Pre and HTC Touch Pro2. iPhone does trigger the smartphone evolution and every cellular firms are watching Apple carefully.

It will be more determined how new iPhone impact on NAND Flash market in 2H09 until the sales figures are published since iPhone 3G S will hit the market on June 19th. According to the past three quarters ,iPhone 3G was launched in 3Q08 in 22 countries and all-time-high 6.9 million shipment was recorded in 3Q08. The shipments in 4Q08 and 1Q09 have down to 4.36 million and 3.79 million respectively due to the global economic slump.

iPhone has been the spotlight since Apple Inc. introduced the product in 2007. The functionality, spectrum development and update have always drawn market attention. In 2008, Apple upgraded its communication standard from 2.5G to 3G and extended embedded NAND Flash from 4GB/8GB to 8GB/16GB.

Apple announced to launch new iPhone model “iPhone 3G S” at WWDC (Worldwide Developer Conference) in San Francisco, California. The “iPhone 3G S” is expected to outperform “iPhone 3G” in terms of functionality and operation speed. Not only NAND Flash content is extended to 16G/32G, 3.0 megapixels digital camera, 7.2 Mbps HSDPA and double execution speed in software application are also equipped in “iPhone 3G S”.

The marketing campaign remains the same, that is, “Advanced spectrum with same old price” still applies to this new generation iPhone. 32GB “iPhone 3G S” is pricing at US$299, US$199 for 16GB one and US$99 for old 8GB iPhone 3G. Two years cellular contract with AT&T is needed to get the good price listed above. iPhone 3G S is expected to launch in July in over 80 countries. Apple does not provide any detail if it will apply the same marketing strategy in other global markets.

COMPUTEX TAIPEI wraps-up with record size, scale and turnout

TAIPEI, TAIWAN: For five days the organizer of COMPUTEX TAIPEI had only one fear; that the dreaded swine flu would strike at and possibly shut down their event, the world's largest ICT procurement hub. But the only flu at this venue was a fervent fever for everything to do with ICT that established fresh records for the size, scale and turn-out.

While other IT shows around the world had cut back, the visitors in Taipei were astonished to discover COMPUTEX TAIPEI 2009 running at max capacity. In fact, even in the face of adverse market conditions this show still managed to squeeze in growth by hosting 1,712 exhibitors who used 4,498 booths. During its first four days, the show welcomed 32,178 international buyers (+ 1 percent) from 214 countries and more than 100,000 international and local visitors (+ 5 percent). The top five countries for international buyers are from United States, Japan, Hong Kong, Mainland China and Korea with Australia new in the top 10 this year.

Top event in ICT shifts into multi-industry info-hub
This year's show was very different. Convergence was the keyword here. Yes, the venue continued to shine as the worlds top ICT procurement center, but it has also become apparent that its increasing taking on the function as an information hub for numerous industries, including for those one doesn't immediately link to IT.

It is here where everyone came from areas as diverse as medicine, automobiles, aerospace and education to create a multi-industry, multi-faceted venue that reflects the true diversity of the smart revolution.

The show's multi-cultural industry link was reflected with Acer teaming up with Google to unveil the Android Notebook. And it was here where AMD launched the world's first DirectX 11 graphics processor. Asus unveiled 11-inch Eee PC Seashell. Intel introduced Core i7. Microsoft announced the wide adoption of Window 7. Mio demonstrated its Litepad series and MSI displayed its latest line of X-Slim Series Notebook. Meanwhile, Thermaltake launched its Level 10, the latest high-end gaming tower designed by BMW.

Netbooks grab the limelight
Netbooks consolidated their status as the real show grabber especially since Taiwan serves up the perfect combo of computing and mobile Internet tech at affordable prices. Lightweight Netbooks with their long battery life are now part of the next hi tech wave. And with Taiwan way out front in the netbook market, COMPUTEX TAIPEI is the natural venue for international tier-one companies to seek partnerships with local companies.

Companies have spared no effort pushing Netbooks to perfection with the best in design and functions all embedded with core processors such as CPUs and GPUs. Numerous international big brands have introduced products for Netbooks: Ion by Nvidia, the new Atom processors by Intel, and Snapdragon by Qualcomm. They team up with well-known companies from Taiwan such as Asus, HTC, Inventec, and Winstron to render the latest user-friendly Netbooks.

Green technologies on display
The theme "Mobile Technologies for a Green World" of COMPUTEX TAIPEI CEO SUMMIT FORUM serves as a great warm-up for the green technologies and products at the show, including CPU, HDD, PCB, power supply, LED backlight and NB. Intel's Ultra-Low Voltage Intel Core 2 dual core processor and 50 percent less power consumption HDD from Hitachi's EcoTrac Travelstart5K500.B new range are some examples.

The power savers introduced by Compucase and Gigabyte as well as SSD by A-Data, Apacer, and Transcend all reflect the green concept. Also, solar power products, fuel cells and LED applications are also going green. Vivitek's H9080FD Home Theater is the world's first LED Full HD Projector.

Self branding
At COMPUTEX TAIPEI the writing is on the wall. Taiwanese are increasingly heading for self branding. That's seen as Acer readies to overtake Dell as the worlds second-largest PC maker after Hewlett-Packard. Taiwanese started by making products for everyone else which carried foreign labels. But a quick cruise through COMPUTEX TAIPEI reveals That Taiwanese companies are rapidly building their own reputations as technology leaders.

Perhaps, the best example would be Eee PC from Asustek which has rendered the netbook, the hottest selling PC on the market. And nearby is Mediateck which brands their own driver chips, storage chips, designing chips for wireless communications and high-definition digital televisions.

Design and innovation soaring with high-tech trends
COMPUTEX TAIPEI design & innovation awards Ceremony announced its five Gold Award Winners at the international pre-show press conference on June 1. The event highlights the importance of design and innovation in today's ICT world. Thermaltake launched Level 10 Extreme Gaming Station of strong performance and brilliant designa brainchild by the company, AMD, and design consultancy BMW Group DesignworksUSA. Acer introduced its Netbook with Google's Android.

Microsoft strongly promotes Window 7, while around 60 hardware and software partners introduce a number of outstanding operations features onto a variety of practical consumer products. Real-time, interactive, graphic interface are some key features for next generation communications.

Procurement match-making meetings generating $700 million
This year, TAITRA arranged more than 2,000 1-on-1 procurement match-making meetings in three show days. These procurement meetings generated on-site business worth a projected $ 100 million dollars and create $700 million in follow-up business. (This year's three-day affair added an extra day to previous two-day events and attracted 256 overseas companies from 42 countries).

Leader talks were 256 representatives from top firms (invited by Taiwan's Foreign Ministry and TAITRA) with annual sales exceeding US$10 million from 42 countries. Many firms represented emerging markets such as Turkey, Argentina, Russia, India and the UAE. Among them, 20 were from key names such as SIEMENS and Alcatel-Lucen (Germany), Best Buy and Future Shop (Canada), ESPRINET (Italy), and Ryoden (Japan) all globally recognized buyers.

Most buyers showed great interest in notebooks, netbooks, GPS, LCD Monitor, POS, etc. And for them visiting COMPUTEX TAIPEI always lets them source the latest ICT products from the best suppliers. Small- and medium-sized exhibitors agree that COMPUTEX TAIPEI offer the best opportunity for them to approach the SVIP buyers, so key players such as A-Data, Asus, Ritek, and Genius were also at the meetings to seek new clients.

Newest technologies discussed and insights exchanged
This year's COMPUTEX TAIPEI CEO SUMMIT FORUM enjoyed the presence of high-ranking executives from Asus, ARM, Google, HP and TI as keynote speakers and panelists. Around 200 people participated in the event themed "Mobile Technologies for a Green World." COMPUTEX TAIPEI FORUM also had numerous high-ranking officials share their new ideas. Nearly 7,000 participated in 90 forum sessions:

Microsoft forum featured a keynote speech entitled "Windows Makes Life Simpler" by Steven Guggenheimer, Corporate Vice President, Original Equipment Manufacturer (OEM) Division attracted 3,300 attendees. There was also the "Future NOW" presentation at e21FORUM 2009 led by Sean Maloney, Executive Vice President, Sales and Marketing at Intel, and green technology panel discussion to share green business strategies with Taiwan enterprises.

DRAMeXchange Compuforum 2009 "Survival Battle - Process Migration and Performance" discussed hot topics surrounding the DRAM, NAND Flash, and SSD industries and was joined by 250 leading memory makers, module manufacturers, PC OEMs and financial analysts.

"Enabling the 3C World of Quadplay" was the theme for NGN Forum 2009. 660 people participated in the event discussing how in an all- IP network era, fixed line, mobile, Internet and television have begun to carry out an unprecedented large integration, leading us to whole new life experience, multiple services and business models.

For this year's DIGITIMES COMPUTEX FORUM, the theme of June 3 was Mobile Technology and Design, bringing in the latest mobile market and technology. The discussion on June 4 focused on industrial trends and application of digital signage. In total, around 600 people participated in the show.

COMPUTEX TAIPEI to celebrate 30th anniversary in 2010
First held in 1981, COMPUTEX TAIPEI will celebrate its 30th birthday in 2010. For the past 29 years, COMPUTEX TAIPEI has transformed itself into not only the world's leading ICT procurement platform, but also a perfect world stage for new product and technology launches from home and abroad.

Step into the ICT future next June 1 to June 5 when TAITRA turns on COMPUTEX TAIPEI 2010.

Source: ACN Newswire

DRAMeXchange Compuforum ' 09: Decipher memory and storage industry

TAIPEI, TAIWAN: Deemed as one of the most successful international events at this year's Taipei Computex show, DRAMeXchange held its annual conference at the Taipei international convention center. Conference participants, ranging from leading memory storage to professionals to numerous related industry experts, came from more than 20 countries.

Two key analysts from the Industry Research Division of DRAMeXchange discussed the opportunities and challenges facing the DRAM and NAND Flash sectors:

Joyce Yang, Vice President of Industry Research Division, estimated that the DRAM supply bit growth in 2009 to be under 10 percent, and the demand bit growth to be lower than 20 percent.

Looking at the capex and fund raising of DRAM makers in 2010, Yang estimated the global DRAM capacity to remain stable year on year, and the 50nm migration progress will be a key factor to more supply growth. She further noted the supply bit growth will likely reach 20 percent ~ 30 percent in 2010, while demand bit growth may be under 20 percent, due to low content growth of Microsoft's new Windows7 operating system as well as the rising popularity of netbooks.

Yang pointed out that if demand shifts to DDR3 faster than the supply shift to DDR3, it could cause a DDR3 shortage, which could stimulate ASP growth in 2010.

Meanwhile, Wayne Chen, Director of Industry Research Division, pointed out due to the suppliers' output reduction and timely drive of demand from the Chinese market, the NAND Flash price has bottomed out of the steep drop in 2008 and rallied back to near the cost. He also added that the demand for NAND Flash will continue to recover in 2009.

The capacity and new technologies of manufacturers will see adjustments, balancing the demand and supply in the market, while the applications of Flash will expand to new fields like SSDs. He also predicted that from 2009 to 2012, the annual output value of global NAND Flash industry will continue to grow, with the yearly growth rate to reach near 30 percent by 2012.

Separately, three guest speakers also shared their valuable industry experience and professional viewpoint at the event:

SanDisk: Operator netbooks to take off in 2010
Doreet Oren, Director Product Marketing of SanDisk, US , shared the viewpoints and suggestions based on the company's long-time cultivation in the SSD field, which will mainly concern the market tendency of Netbooks. SanDisk believes that operator Netbooks to take off in 2010.

Sandisk introduced its nCache, the SSD efficiency improving technology, which has some advantages over the traditional DRAM cache. In addition the vRPM, a new guideline for measuring SSDs which regards higher IOPS to provide better user experiences.

JMicron: SSD transforming interface will continue to advance forward
The world's leading NAND flash controller provider, JMicron Technology's CEO, Tim Liu, addressed the elementary keys and possible problems on the efficiency of SSDs.

The company estimates that the SSD transforming interface will continue to advance forward, while the process technology of NAND Flash will evolve to 2X NM amid the development of the mainstream 3X nm. Compatibility of the controller IC with the Flash chip is important;the fault-tolerance of ECC should be improved to 15bit or 24bit.

Hitachi GST: By 2010, server field will account for 70 percent of global enterprise-level SSD market
Steven Liu, General Manager of Taiwan & Shanghai Region of Hitachi Global Storage Technology, pointed out that in the enterprise-level storage system pyramid, the top portion will be occupied by SSDs, the middle will be the 2.5 inch, 15,000 round SAS system for significant applications as well as 2.5 inch or 3.5 inch 7,200 round SATA/SAS for regular applications, and the base will be the magnetic tapes and optical hard disk storage devices for storing copies.

Hitachi estimated that by 2010, the server field will account for 70 percent of the global enterprise-level SSD market, and the storage array field will take up 30 percent. The company also forecasts the price of each GB in the SSD to fall to USD 3 in 2012 from the current USD20.

SanDisk release
The challenge to deliver low cost computing devices with a user experience that meets the intended usage scenario continues to segment the netbook market and introduce innovative solutions. The netbook market is expanding from the traditional retail channel to sales via the Mobile Network Operators (MNOs).

The storage device, being a significant part of the BOM, takes a front seat in this discussion. The known SSD value proposition of reliability, performance, form factor and power consumption is now complemented by lower cost than HDDs at the required lower capacities

At the CompuForum 2009, a global seminar to be hosted by DRAMeXchange, SanDisk, the inventor and world's largest supplier of flash storage cards will introduce a revolutionary method specifically geared to enhance performance when faced with an actual typical Netbook usage scenario.

SanDisk's second generation pSSD being introduced at Computex employs a new technology called nCache to improve user responsiveness and address incidence of "stalling" or "shuddering" seen in first generation Netbook SSDs. This non-volatile write cache feature is capable of supporting burst performance up to 5 times the steady state performance, to further enhance the user experience. In addition because nCache is non-volatile the user's data is always protected.

2H May mainstream NAND Flash MLC average contract price slightly declined 2-6pc

TAIPEI, TAIWAN: NAND Flash contract price remains flat in 2H May. Some mainstream MLC average contract price has slightly declined 2 percent to 6 percent due to the high density products promotion by some vendors in Mid-May,says DRAMeXchange.

Fig.1: 32Gb MLC NAND Flash Contract Price trendWith the coming quarter end, some vendors already initiated the promotion programs to lower their inventory level. High density NAND Flash MLC chips under new process technology have comparably favor discount than those low density chips under more mature process technology.

Therefore, the decline degree of the contract price “Low” for 32Gb MLC NAND Flash is larger than other NAND Flash chips in 2HMay. Meanwhile, some vendors keep making effort on the contract price stabilization to improve profitability since they still treat system maker customers as the shipment priority and result in the flat contract price “High” of 32Gb MLC NAND Flash in 2HMay.According to DRAMeXchange.

As for the demand side, DRAMeXchange states that May and June are perceived as the slow seasons for NAND Flash end products such as memory card and UFD. Some downstream clients are expecting for lower chip price for the sake of promotion in summer break.

Fig. 2: 32Gb MLC NAND Flash Spot Price trendHowever, the 2Q09 profitability has turned to the first priority of the suppliers and stable chip price in June is the clearly intension. The mindset difference toward future price between buyers and suppliers has resulted in the recent fluctuation and consolidation in spot market.

The June contract price is likely to remain flat or might slightly soften due to the tug-of-war status between both sides.

All in one PC will be a better seller with Windows 7

TAIPEI, TAIWAN: The market segment of All in One PC (AIO) was always there since years ago, it’s just that it used to be a niche, alternative product. With the coming Windows 7, a new operating system that Microsoft will launch this year, supporting Multi-touch, Intel Atom CPU, and including Media Center Edition, which was optional in the XP era, in the Windows 7 Home Premium edition.

These not only provide new interface application to the All in One PC, but also make its price more competitive while positioning as a multimedia device. According to DRAMeXchange.

PC vendors currently lock on mature markets such as Western Europe, US, and Japan as the targets of All in One PC. Because of that the popularity of PC is already high in the mature markets and the current sales mostly come from repurchase, such product does have new topic features to stimulate consumes’ purchasing desire.

The DT (Desktop PC) market hasn’t gotten any new sales topic for a long time and that’s why many PC vendors were drawn into this All in One PC wave. Among the markets mentioned above, the All in One PC was already accepted as regular product in Japan due to its crowdedness and limited space for each person, and the brand awareness has already maturely formed. Therefore, the major battle ground of All in One PC would be Western Europe and the US.

Except the characters of market development, the different sales strategies of different Windows 7 edition also let the vendors first decided to focus the All in One PC on the mature markets. There are different editions of Windows 7, including Windows 7 starter, Windows 7 Home Basic, and Windows 7 Home Premium.

According to the plans of Microsoft, the Starter and Home Basic editions can only be sold in the emerging markets and Home Premium edition will be majorly sold in the mature markets. Under the operating system sales limitations, Western Europe and the U.S. markets are the places where the All in One PC can fully play out the applications of Multi-touch and multimedia features.

As far as the All in One PC market scale is concerned, the consensus of PC vendors is that the beginning growth momentum of the All in One PC will not be as strong as the Netbook, but the long term prosperity and the market share proportion it will take in the DT market may surpass the performance of Netbook in the NB market.

There is not screen size limitation of the All in One PC, as long as the price and performance can compete with the current DT, it will have chances to gain its market. With the support of digital home trend, if the All in One PC products are embedded during the construction of new houses, it will be adopted even more.

DRAMeXchange believes that it will be seen stronger shipment momentum of the All in One PC in autumn with the launch of Windows 7 and estimates that the All in One PC will take 10% of desktop market share with the shipment scale of 3.5 million units in Q409. The annual market share of the All in One PC will be lower than 5% in 2009.