(I suppose someone has to follow memory pricing)
Conservative procurement mutes transaction prior to high season; Samsung Mobile Solution Forum recap; Seasonal upturn guaranteed, but uncertainties still exist
Published Jun.4, 2008
Conservative procurement mutes transaction prior to high season
DRAM spot price trend was still weak last week, with price fluctuation for both eTT and branded DDR2 remained limited. Price of 512Mb DDR2 was flat at US$0.98 and 1Gb was up 1.5% at US$2.01 during May 27-June 2. Whereas for the branded segment, price of 512Mb DDR2 667MHz was flat at US$1.02 and 1Gb was down 0.9% at US$2.13 in the same period.
Despite most industry players regard US$2 as a price bottom, conservative procurement prior to any meaningful demand recovery explains the weak pricing. As growing influence from the ongoing Computex Taipei 2008 and back-to-school season will be seen, DRAM prices are likely to rebound when demand has hit bottom.
Samsung Mobile Solution Forum recap
Samsung held its fifth Mobile Solution Forum at Taipei on May 26. On the sideline of many new technology demonstrations for all mobile applications, the company indicated that it plans to increase investment and sales exposure to all handset-related applications as it believes that demand for commercial, consumer electronics and handset applications will hit record high over the coming decade. Mobile TFT-LCD, mobile DDI, memory, application processor, mobile TV and image are the key solutions that Samsung demonstrated at the forum.
Several key development trends for the mobile market are being identified: 1, High-end smartphone will gain stronger penetration with corresponding CAGR to reach 52% during 2007-2010 and shipments to hit 422mn in 2010, representing one thirds of handset shipments. 2, low-power, high-resolution, light but big display, with user-friendly interface, will be technology development focus for display. 3, Higher memory density is essential as handsets equip with stronger functions.
As more functions are equipped in handsets, whether a handset can outgrow other models depends much on whether it carries a user-friendly interface and supports latest technology. Company CEO of semiconductor unit Oh-Hyun Kwon indicated principle designs of consumer electronics have been completely employed in wireless communication. Thus, integrating the latest IT technology and creating products that address consumers’ habits is critical for handsets and digital consumer electronics. For Samsung, it aims to bring its innovations to memory, system LSI and FPD.
While pointing out key trends and challenges for mobile applications, Samsung has also exhibited a series of PDAs, handsets and ODM devices at the forum. For the handset segment, the company has introduced: 1, the industry’s first SiP (system-in-package) that equips with a 1GB mobile DRAM and a 300MHz mobile CPU; 2, a one-chip display driver IC that supports QVGA resolution; 3, a 260k color DDI for AM OLED display and; 4, 2.5” QVGA TFT-LCD display for MP3 player.
When ASP for NAND Flash keeps shrinking, new business potentials from the mobile segment is observed. Growing adoption of NAND Flash also spurs integration of loads of multimedia applications in mobile devices. During the forum, Samsung has unveiled its OneNAND Flash memory and Flex-OneNAND for mobile applications. Of which, the OneNAND delivers a 4x faster data read performance than conventional NAND Flash and a 34x data write performance than NOR Flash, whereas Flex-OneNAND is a combo memory of SLC and MLC NAND Flash. When comparing OneNAND to LB NAND, LB NAND delivers a data read and write speed of 31.3MB/s and 13MB/s, and OneNAND delivers a data read and write speed of 108MB/s and 17MB/s. Samsung has also introduced a moviNAND (eMMC) memory that has built-in MMC controller supporting MLC NAND Flash. The memory supports JEDEC standard and a wide-array of applications.
In addition to NAND Flash for mobile applications, Samsung has displayed a 256GB MLC NAND Flash-based SSD that supports SATA II interface. This SSD is the one that delivers the best data execution performance so far, with data read and write speed at 200MB/s and 160MB/s respectively. Samsung plans to start pilot production of this SSD in September, 2008 with official production slated to be in late 2008. This SSD is likely to be the biggest and fastest SSD so far once hitting shelves.
Key captures from the forum is that the consumer electronics market will dominate by MP3 player, digital camera, smartphone with Internet surfing and GPS functions. Regarding trend of memory usage in these consumer electronics, majority of them will equip with built-in memory and support external memory card slot at the same time. As a leading consumer electronics vendor, Samsung has also highlighted importance of a user-friendly interface and power efficiency which have also been the key indicators in this market.
NAND Flash spot price recap, May 26-June 2
In the SLG segment, price of 1Gb stayed flat at US$1.77; 2Gb down 1.1% t US$2.80; 4Gb down 2.5% to US$3.52; 8Gb down 0.7% to US$6.90 and 16Gb down 1.7% to US$16.07. In the MLC segment, price of 4Gb down 2.6% to US$1.85; 8Gb down 10.7% to US$2.74; 16Gb down 7.5% to US$4.47; 32Gb down 5% to US$10.43 and 64Gb down 7.8% to US$20.59.
Seasonal upturn guaranteed, but uncertainties still exist
Price of 1Gb DDR2 hovers over US$2 range ever since DRAM price nose dived amid supply glut in early 2007. Despite price keeps heading south, average memory content per PC has been doubled from 256MB to 1GB. However, a wide-spread PC component price hikes may somehow bring uncertainties to DRAM demand.
While DRAM content per box is spurred from weak memory pricing, notebook OEMs have proposed price adjustment for 2H as aggravated cost pressure at component suppliers is stem from upsurge of oil price and revised labor law in China. Therefore, most notebook vendors have agreed to accept the price hike as they wish component makers to reserve shipments priority to them.
The success of a price adjustment implies that notebook vendors have a positive outlook for 2H. Since the price adjustment of a US$5-20 per unit does not bring a critical impact to overall FOB cost, notebook vendors are believed to capable to ease the pressure via adjusting component mixture or channels without passing on the costs to consumers.
When notebook vendors are expected to ease their cost pressure via the mentioned measures, seasonal demand surge for DRAM will be affected. Notebook vendors may either cancel adding memory to system without charging extra money, or reducing memory content per box. Most channel retailers who equip their systems with 1GB memory module and bundled the system with an additional 1GB module for promotion purpose, may also adjust the policy.
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