Consolidation in DRAM industry, TW players’ role to be vital; More high-density SSD in SATA interface to hit shelves
Published Mar.11, 2008
Consolidation in DRAM industry, TW players’ role to be vital
Amid Nanya and Micron’s latest JV on 50nm and below DRAM technology, DRAM industry marks a new page for vertical and horizontal integration. Recalling the DRAM industry in 1998, rapid expansion of 8-inch wafer that led to price plummet of SDRAM, has eventually resulted in a wave of consolidation among industry players. A similar scenario arrives this year when DRAM makers are aggressively boosting their 12-inch wafer capacity on one hand, and weaker-than-expected Vista impact led DRAM price drops below variable cost on the other. Without a market consensus of expansion trim, DRAM makers are likely to enhance their profitability and cost structure in a fundamental manner via consolidation.
Whenever price drops below expectation, investment opportunity emerges. Some DRAM makers choose to seek financial backup to strengthen themselves and some strengthen their existing foothold by tightening ties with peers, developing new markets and blocking new entrants. In contrast to what we seen in 1998, DRAM makers are going to play a vital role over this battle. Despite most Taiwan DRAM makers are lack of their own technology, their cost structure is indeed head-to-head with overseas rivals. If they are capable to produce on their own technology, they are likely to be the final winners.
Quite DRAM market
After having prices stabilized in the week Feb 26-Mar 3, DRAM spot prices (both eTT and branded) managed to sustain this stability, with fluctuation limited at 1% range in the week Mar 4-10.
In the week Mar 4-10, prices of eTT DDR2 512Mb and 1Gb dropped by 2.3% and 3.4% on week to US$0.84 and US$1.69; where prices of branded DDR2 512Mb and 1Gb dropped by 1.0% and 1.5% to US$0.98 and US$1.98.
In light of the rapid appreciation of NT dollar against US dollar, DRAM and module makers have slowed down their shipments in order to prevent further loss. But this strategy also implies an aggravated inventory pressure among them. Besides seasonality impact, the ongoing CeBIT show at Germany has also distracted transaction.
In the contract market, price of DDR2 667MHz 1GB DIMM was declined by 2.8% at US$17.50 and 2GB DIMM was declined by 4.8% to US$40 in 1H Mar. Bountiful inventory that OEMs house on hand is the primary reason for the price drop, where seasonality also weaken price trend. DRAM contract price is unlikely to stay flat on month, implying that price negotiation in 2HMar will be more difficult.
More high-density SSD in SATA interface to hit shelves
Samsung announced that it has moved its latest 64GB SSD (solid-state drives) into volume production in February 2008. The latest SSD supports SATA II interface with read and write speed at 100MB and 80MB per second, representing a 60% leap over SATA I SSD and 2-5x leap over conventional HDD (hard-disk drive).
Besides feeding needs for high-end notebook users, this SSD also demonstrates enhanced power efficiency. In contrast to conventional HDD, this SSD saves 75% power (1.45w vs 2.1w). Since this SSD is designed for high-end notebook users, it weights only 73kg in order to meet their mobility demand. Powered by SLC NAND Flash, it also delivers good shock resistance and low noise features.
This SSD has already gained Lenovo’s adoption in its ThinkPad X300. Backed by the compact design and high shock resistance, this notebook is ideal for business usage with stable and enhanced performance. Samsung indicated that HDD market will continue exist, but SSD will create new market segments upon the differentiation it delivers. The company projects substantial demand ahead.
Besides Samsung, Toshiba, SanDisk, Micron and Intel have all planned for respective launch of high-density SDD. Of which, Toshiba has introduced a MLC NAND Flash-based SSD in 128GB, with respective read and write speed at 100MB and 40MB. SanDisk has also introduced its SLC NAND Flash-based SATA II SSD in 72GB, with a respective read and write speed of 66MB and 52MB, weighted only 44kg. Micron introduced its SLC NAND Flash for a 64GB SSD in SATA 3.0 interface, with respective read and write speed at 65MB and 35MB. Of the Micron SSD lineup, the 2.5” Real SSD only weights 70kg and the 1.8” model weights only 28kg. Intel prepares launch of high-density SSD in SATA interface from 2Q08, on the sideline of promotion of other turbo memory applications.
NAND Flash contract price recap
NAND Flash contract price drop limited in 0-15% range in 1H Mar, with mainstream MLC NAND Flash price drop ranged within 0-8% and SLC NAND Flash ranged within 0-15%. The drop was stem from discouraged transaction amid slower-than-expected electricity resumption after heavy snow storms in China and unclear demand trend amid traditional slow season. Downstream players are aggressively growing their deployment in emerging regions in attempt to compensate weak sales from Europe and the US. If demand for NAND Flash warms up in 2Q08, corresponding contract prices are likely to stabilize accordingly.
NAND Flash spot price recap, Mar 3-10
In the SLC segment, price of 1Gb dropped by 3.7% to US$1.83; 2Gb dropped by 4.6% to US$2.72; 4Gb dropped by 2.8% to US$4.18; 8Gb dropped by 4.3% to US$8.19 and 16Gb drooped by 0.7% to US$19. In the MLC segment, 4Gb dropped by 3.8% to US$2; 8Gb dropped by 2.2% to US$2.66; 16Gb dropped by 1.4% to US$5.04 and 32Gb grew by 0.1% to US$11.03. |
