As someone on this thread pointed out, you cannot lump the entire market for memory chips together, and it is equally ridiculous to view ONE month's spot market price("though not yet in the contract market".!!!)as indicative of the flash markets overall direction. What is interesting is the markets jitteriness about the cyclical nature of the semi business. The investors who are going to make the big money are the ones who realizes that the explosion of new devices (and don't forget ADSL and cable modem!) requiring more flash memory will wring out a good deal of this boom - bust mentality.
The SSB report suffers from major short sightedness:
Flash demand usually softens in the summer months and you have end of quarter adjustments. If you go back to last quarter's numbers you will also see light dumping of flash product at the end of the quarter, so it is not surprising to see the prices (which by the way have risen dramatically, and I mean dramatically this year!) soften a little.
Good luck,
Eric
SSB says: "However, in several key areas---capacitors and
Flash---prices have begun to moderate in the spot market, though not yet in the contract market. For the first time in over a year, we have
begun to see spot market brokers indicate lower prices for some Flash
products."
Ref: semiconductoronline.com{2D3B0E89-4DD6-11D4-8C54-009027DE0829}&Bucket=Chip+Price+Report
6/30/2000 As we finish up the second quarter, NECX (Peabody, MA,
USA) product manager Paul Zecher reports that the flash market is
still strong. Despite the usual end of quarter dumping of product from
many distributors both independent and franchised, there is still
plenty of opportunity in the open market. Open market prices have
come down somewhat in AMD flash, as also happened at the end of
the first quarter. On the flip side, Intel prices are soaring, especially
for 16, 32, 64 and 128 Mbit chips.
According to NECX product manager Andy Broe, tantalum and
ceramic surface mount capacitors remain in very strong demand in
the open market. June will be the busiest month yet for open market
transactions on both. Prices have remained steady during the last
few weeks, with 227 capacitance remaining the hottest amongst the
low equivalent series resistance (ESR) caps.
The outlook for the summer appears to be strong, Broe said, despite
the summer vacation months. While the demand should remain solid
and steady during the summer, it is likely there will be some
softening in the market.
CPU open market activity has slowed down in recent days, NECX
product manager John Holden said. The Intel price drop scheduled for
July 16 has OEMs concerned because open market pricing is
already below direct pricing. Due to summer vacations, production is
expected to stay down for the next few months. Overall, pricing is
dropping for 700 MHz and faster Pentium III chips, but not so much
for slower CPUs.
NECX brokers say that market participants expect the DRAM market
to tighten in Q3 of 2000. The 8X8(64Mbit) chips have reached the
$8.00+ level in the open market, NECX product manager Stephen
Buckler said, with direct pricing from $7.25 - $7.50. Most
manufacturers are stating that inventories are low and anticipate the
market getting tighter. Demand in the open market has been
lukewarm with many buyers leery of the recent run up in prices,
based upon the market fluctuations over the past year.
In the last year, it was not unusual for manufacturers to tighten
supply, which drove pricing up, only to quickly release product into
the open market causing a collapse in price. Still, Buckler said, we
are in that time of year when prices typically retreat; yet current
pricing has increased and appears to be very stable. Despite low
demand, the recent escalation in pricing suggests that inventories
are indeed low. With the recent boom in the Web and web-based
products, analysts suggest paying particular attention to
16x8(128Mbit) and 32x4(128Mbit) product used to assemble server
type modules.
For more complete chip pricing information, visit NECX, a
VerticalNet Company. |
