Salomon Smith Barney's Jon Joseph published the following on Saturday, January 29:
"DRAM spot prices in a free fall.
"DRAM spot prices continued to fall as manufacturers built inventory. Prices for mainstream 64Mbs fell over $1.00 to below $7.00, while prices for mainstream 128Mbs fell to the low $16 range, down from $18.00 the previous week. Broker sentiment grows increasingly negative. Volumes remain light and prices are falling so fast now that brokers are taking losses if they hold onto any inventory whatsoever. Anecdote last week suggested that large DRAM makers were peddling several hundred thousand 64Mb parts at a $0.20-0.30 discount to spot. Clearly, inventories are overflowing as yields on 0.18-micron and 0.21-micron shrinks improve faster than the market is able to absorb. Micron (MU, 3S) and Samsung product, relatively rare in the spot market over the last few quarters, historically sold for a slight premium. We are now finding ample supply from these vendors, selling at spot market price. We believe contract pricing is heading lower, with most estimates suggesting $7.25-7.50 for the first half of February, down from the current $8.00 range. In addition, one large maker anticipated contract falling to $6.00 by the end of February, while another estimated $4.00 prices by summer."
This certainly adds credence to Rick Whittington's two reports issued earlier last week.
Good trading, Glen |
