DRAM Price is waiting to go steady up in Q3; Arrival of 3G iPhone poses gleam of light to NAND Flash market
Published Jun.17, 2008
DRAM Price is waiting to go steady up in Q3
DRAM transaction remains slow in the spot market last week. As both demand and supply volume reduced, a mild price decline is observed, with price of DDR2 eTT 1Gb maintained at US$2.10 range. DRAM spot prices are expected to have a mild consolidation in the near term, but the downside should be limited. DRAMeXchange believes spot pricing should go steadily up in 3Q.
During the week June 9-16, price of eTT 512Mb down 0.97% closed at US$1.02 and the price of 1Gb up 0.96%, close at US$2.11. Whereas in the branded segment, price of DDR2 667MHz 512Mb remained unchanged at US$1.04 and 1Gb down 0.93% closed at US$2.14.
Regarding contract price negotiation in 2HJune, DRAM makers generally plan for a 2-5% hike as their supply could not satisfy all demand. While some OEMs have secured their supply through late June in early May and some other buyers will negotiate in accordance to market status, some PC OEMs said lower quotes are likely as chipmakers are entering quarterly earnings report season.
DRAM price trend in both spot and contract market only posted a mild growth over the past month, despite the DRAM market has shadowed by negative news such as blackout at Hynix Wuxi, China fab and Samsung reclaimed defective DRAM chips from customers. This signifies that the upward price momentum is limited.
DRAMeXchange observes that OEMs are still housing a safe inventory level, thus DRAM makers are hard to raise their quotes despite claiming a tightening supply. Also, given that OEMs are still capable to adjust their product mixture in 1GB to 3GB of memory, DRAM makers are hard to take a strong stance over price negotiation.
DRAMeXchange projects that contract price for 1Gb DRAM to stay in the range of US$21-25 in 3Q and price of 2GB to be in the range of US$40-46. Spot price of 1Gb, however, should only grow by 10-15% as inventory is relatively high. Price should peak during August and September.
Arrival of 3G iPhone poses gleam of light to NAND Flash market
The long-awaited 3G iPhone was finally unveiled during the recent WWDC (World Developers Conference). According to Apple’s official website, 3Gb iPhone supports 3.6Mbps HSDPA standard, embedded GPS chip for electronic map and navigation, Microsoft Exchange ActiveSync for push mail, calendar and contacts. Users can also have a secured access to a company server via Cisco IPSev VPN, WPA2 Enterprise and 802.1x authentication. Aside from the features mentioned above, 3G iPhone is notionally identical to the first-generation iPhone. In terms of memory density, the 3G iPhone is available in both 8GB and 16GB versions.
What shocked industry players most during the launch is the new iPhone’s retail price. Price of 8GB is only US$199 and 16GB US$299, versus the first-generation iPhone’s US$399. Noted that these prices are only valid if consumers ink a two-year subscription contract with telecom service carriers, implying that the friendly pricing is indeed partially subsidized as consumers will grow their payments to these carriers.
The 3G iPhone will be officially hit shelves on July 11 at 22 countries and the phone is expected to be available at over 70 countries by end of 2008. Since retail price of the new phone is halved from the first-generation iPhone, and the number of available countries has been grown to 22, DRAMeXchange projects that its shipments to surpass 12mn units in 2H08.
Most industry players anticipate that the new 3G iPhone to help consume some excess NAND Flash capacity. DRAMeXchange estimates that 3G iPhone will consume about 1,152MGb of NAND Flash in 2H08 as shipments proportion of the 8GB and 16GB version will be the same. This amount of NAND Flash consumption is translated as 6% of global NAND Flash output. Thus, we think 3G iPhone does help consuming NAND Flash capacity. But whether it will pose a critical impact over demand-supply and pricing still depends on the supply strategy of upstream NAND Flash chip makers.
NAND Flash price recap, Jun 9-16
In the SLC segment, price of 1Gb dropped by 1.7% to US$1.74; 2Gb dropped by 3.2% to US$2.71; 4Gb dropped by 1.2% to US$3.38; 8Gb dropped by 2.9% to US$6.60 and 16Gb dropped by 1.3% to US$15.83. In the MLC segment, price of 4G dropped by 3.2% to US$1.79; 8Gb dropped by 8.6% to US$2.45; 16Gb dropped by 6.6% to US$4.42; 32Gb dropped by 5.1% to US$9.89 and 64Gb dropped by 2.5% to US$19.54.
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