DRAM prices continue to increase last week. 16mb DRAM rose another 21% - maybe we have a hope eventually.
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10:30am EDT 17-Aug-98 Montgomery Securities (J. Joseph 415 627-2925) MU
DRAM and Microprocessor Pricing Update
NATIONSBANC MONTGOMERY***NATIONSBANC MONTGOMERY***NATIONSBANC MONTGOMERY
DRAM AND MICROPROCESSOR PRICING UPDATE
August 14, 1998 SEMICONDUCTORS
Jonathan Joseph (415) 627-2925 First Call
Claude Hazan (415) 627-2845
DRAM prices uptick once again. We found in our weekly survey Friday
that 16Mb 2Mx8 SDRAMs rose 21% on the week, while 64Mb 8Mx8 SDRAM's rose
another 9%. The increasingly mainstream 64 Mb PC100s (100MHz) rose 2%, while
the less mainstream 16 Mb 4Mx4 EDO rose another 14% over last week's prices.
Recent production cutbacks and fab closures, coupled with increasing PC demand
have had the cumulative affect of DRAM spot prices rising for the third week in
a row. This trend may be sustainable over the longer-term given several
factors:
o Shrinking DRAM inventory levels and increasing lead times indicate demand
is solid. We believe inventory levels at all manufacturers have dropped
sharply in the past months as seasonal demand and PC inventory
replenishment has picked up.
o The shift to 64 Mb PC-100 DRAM components is becoming increasingly
necessary as PC manufacturers push high-end (P-II 300-450 MHz) models.
These high-end machines require faster memory and the PC-100, which is
currently selling at a 5% premium, is filling the need. PC-100 output
still falls short of total potential demand.
o Financial strains on Korean DRAM producers will inhibit the capital
expenditure necessary to advance their manufacturing processes to the
next level of die shrinks. This should give Micron Technology (MU,
$33-3/16, BUY) a strategic advantage as the company has gradually
shifted to a more advanced 0.21-micron manufacturing process over the
last few quarters. Ultimately, the winners and losers in the DRAM market
may be decided by their access to capital.
o The increased need for memory. The average memory level per computer has
increased from our 1997 estimate of 29MB to 53MB in 1998 and could be
revised to 64MB of DRAM per computer by year end. The proliferation of a
new generation of NT software will only fuel the future growth of the
memory market.
Intel processors still selling at premium. Average selling prices have
maintained an 11% premium to list pricing, in line with our survey two weeks
ago. As we would expect, high-end models (PII-400, 350, 333) have moved to
parity or a slight discount to list, while models which the company is trying
to take off of the market (PII-300, 266, P233MMX) have moved to higher prices.
This indicates that marginal demand remains strong.
Recent PC-66 DRAM Pricing
16 Mb 64 Mb
4Mx4 EDO 2Mx8 SDRAM 4Mx16 EDO 8Mx8 SDRAM
Price % Change Price % Change Price % Change Price % Change
6/1/98 $1.55 $1.69 $8.72 $8.00
6/5/98 $1.55 0% $1.69 0% $8.72 0% $7.84 -2%
6/12/98 $1.55 0% $1.49 -12% $8.83 +1% $8.34 6%
6/19/98 $1.55 0% $1.49 0% $9.23 +5% $8.64 +4%
6/26/98 $1.50 -3% $1.53 +3% $8.78 -5% $8.27 -4%
7/6/98 $1.44 -4% $1.44 -6% $8.98 +2% $8.11 -2%
7/10/98 $1.44 0% $1.44 0% $8.81 -2% $7.98 -2%
7/17/98 $1.44 0% $1.44 0% $8.60 -2% $7.88 -1%
7/24/98 $1.44 0% $1.44 0% $8.45 -2% $7.83 -1%
7/31/98 $1.49 +4% $1.78 +24% $8.64 +2% $8.68 +11%
8/7/98 $1.65 +11% $1.78 0% $8.64 0% $9.13 +5%
8/14/98 $1.88 +14% $2.15 +21% $8.64 0% $9.91 +9%
Source: NationsBanc Montgomery Securities LLC, American IC Exchange
Recent PC-100 DRAM Pricing - 64Mb
8Mx8 SDRAM 16Mx4 SDRAM
Price % Change Price % Change
7/13/98 $9.50
7/17/98 $9.59 1%
7/24/98 $9.59 Flat
7/31/98 $9.59 Flat $9.80 Flat
8/7/98 $9.69 1% $9.80 Flat
8/14/98 $10.00 +3% $9.95 +2%
Source: NationsBanc Montgomery Securities LLC, American IC Exchange
Intel CPU Spot Pricing
Jan-98 Feb-98 Mar-98 Apr-98 May-98 June-98 Jul-98 Aug-98
PII-450 $755
PII-400 $833 $804 $720 $621 $585
PII-350 $626 $590 $515 $428 $392
PII-333 $850 $738 $643 $505 $486 $412 $324 $312
PII-300 $728 $516 $499 $362 $345 $295 $233 $263
PII-266 $503 $372 $363 $233 $246 $201 $201 $219
PII-233 $279 $278 $256 $203 $185 $167 $187 $182
Celeron - 300 $175 $121 $111
Celeron - 266 $182 $160 $102 $90 $86
Pent233MMX $271 $191 $191 $133 $126 $116 $140 $147
Pent200MMX $203 $124 $124 $103 $101 $104 $128 $139
Pent166MMX $115 $102 $101 $94 $96 $88 $100 $108
Premium/Discount to Intel List Price
Jan-98 Feb-98 Mar-98 Apr-98 May-98 Jun-98 Jul-98 Aug-98
PII-400 1% -2% 0% 5% -1%
PII-350 1% -5% -1% 1% -7%
PII-333 18% 2% 10% 3% -1% 0% 3% -1%
PII-300 37% -3% -6% -3% -8% -3% 11% 26%
PII-266 34% -1% -3% -5% 0% 2% 26% 38%
PII-233 4% 4% -4% 3% -7% 4% 16% 13%
Celeron - 300 10% 8% -1%
Celeron - 266 17% 3% -4% 5% 0%
Pent233MMX 40% -1% -3% -1% -6% 9% 32% 39%
Pent200MMX 65% 1% 1% 9%
Pent166MMX 21% 7% 6% -1%
Total 31% 1% 0% 2% -3% 2% 12% 12%
P-II's 23% 1% -1% 0% -4% 0% 11% 11%
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