Memory module makers strengthen fundamental structure to counter shaky market; MID, with the rise of global Social Networking Websites, brings in new demand for NAND Flash
Published Mar.18, 2008
Memory module makers strengthen fundamental structure to counter shaky market
Amid the Lih Duo bounce check issue, financial status at memory module makers again draws attention. The entire DRAM industry (except for backend houses) is bleeding in red alongside with the aggressive DRAM expansion. Take the price of DDR2 eTT 512Mb for instance, its price has been nose dived by 88.1% from US$7 in September 13, 2006 to the current US$0.83. Under this severe price pressure, memory module makers could hardly avoid losses if they fail to ease inventory fast. Those less competitive players are forced to exit the market, while those left behind strive to strengthen their competitiveness.
While suppressing DRAM chip inventory level from several weeks to 3-5 days, most memory module makers strive to secure their footholds via offering more added-value services, and balancing exposure between DRAM and NAND Flash. In addition to strengthen deployments in existing markets, they also grow presences to emerging markets such as India, Russia and the Middle East, driven by the attempts to ban competitors and grow bargaining power with chip suppliers.
DDR2 eTT 1Gb posts biggest drop in March at 9%
A weak pricing environment was maintained in DRAM spot market last week, despite a downward price trend has been observed in the week before. Price of eTT 512Mb was flat on week at US$0.83 while price of the higher-density 1Gb part has dropped by 4.2% to US$1.60. Note that price of eTT 1Gb is approaching the lowest level of US$1.57 as recorded on November 27, 2008. Prices of branded chips were relatively stable last week, with price of DDR2 667MHz 512Mb and 1Gb dropped by 3.1% and 2.6% respectively at US$0.93 and US$1.90.
As in March, price of eTT 1Gb led the price fall by dropping 9.1%, versus the 5.7% drop as seen in eTT 512Mb and the 5.4% drop as seen in DDR2 667MHz 1Gb. Given that more Taiwan DRAM makers grow their production proportion of 1Gb parts in expense of 512Mb, and technology and yields enhance, corresponding price drop in the 1Gb segment thus accelerate. In light of low season impact, and weaker-than-expected sales for the industry as a whole, we believe price drop pressure will persist when overall transaction volume is low.
In the contract market, price negotiation for 2H Mar is still underway. DRAM makers should found negotiation difficult due to: 1, downward price trend in spot market; 2, quarterly financials pressure at DRAM makers and 3, inventory level at OEMs. Yet, they will still strive to preserve a flat quote we believe.
MID, with the rise of global Social Networking Websites, brings in new demand for NAND Flash
Intel introduced its mobile Internet Device (MID) in attempts to grab the opportunity from buoyant social networking website market. According to the subscribers’ background survey, there are a billion social networking website subscribers, with 154mn of them have access to websites on a daily basis and spending a total of 3,000mn minutes each day at maximum.
As most subscribers of social networking websites are familiar to access Internet via PC, there derives the opportunity of MID. For highly mobile people who want engaging, rich Internet experiences on the go, MID offers the freedom and flexibility to communicate with others, enjoy digital media, fully utilize “dead time” and access information anytime, anywhere - all using a small, ultra-mobile device.
MID is classified in between smart phone and premium smart phone. Despite the fact that MID supports vocal call functionality, value-added Internet services are the key emphasis. According to Intel, the number of Internet surfers via handset is small. But in 2012, the amount is set to expand to 600mn. By then, a huge population will use their handheld devices to access Internet for information seeking via search engines, AV files downloading and email, etc.
MID supports a panel size of 4.5-6” only due to its mobility, power saving and efficiency pursuits. The most remarkable breakthrough is that MID not only supports Windows Vista, but also other OSs such as Red flag and Ubuntu Linux.
MID could be described as a gadget that carries all cutting-edge technologies of Intel’s: 45nm High-k process, a power consumption of 0.6-2.5w TdP, Atom dual-core CPU, embedded south and north bridge, HD video encoder, SDIO, 3D graphics, PCI Express, USB client SoC and connections to WiFI/WiMAX/3G/Bluetooth/GPS. Powered by the Menlow platform, MID has a compact size of 143mmx74mm only with a SSD supports a minimum memory size of 2GB.
Among all system makers, HTC will be the first to introduce its MID, with Inventec, Quanta, Compal, Asustek, Elektrobit have also introduced respective prototypes. If launching schedule of MID is smooth, it is likely to serve as a critical NAND Flash capacity consumer. MID is currently priced at US$599-799.
NAND Flash spot price recap, Mar 10-17
In the SLC segment, price of 1Gb has dropped by 1.1% to US$1.81; 2Gb dropped 0.7% to US$2.70; 4Gb dropped 2.9% to US$4.06; 8Gb dropped 2.9% to US$7.95 and 16Gb dropped 2.1% to US$18.60. In the MLC segment, price of 4Gb dropped by 2.5% to US$1.95; 8Gb dropped by1.9% to US$2.61; 16Gb grew by 1.4% to US$5.11 and 32Gb grew by 2.3% to US$11.36. |
