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Report: DRAM prices may soon hit bottom

Posted: 26 Apr 2007 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM 2007 market? DRAM hit bottom? DRAM NAND flash? NAND flash market?

DRAMeXchange reports that the DRAM contract price slipped to roughly $20 for the second half of April, which also affected the spot market price trend. In light of the PC selling season in the second half, DRAM demand will increase as PC OEMs build up on their inventory. This can make 2H 2007 represent the bottom of the current extremely low DRAM pricing levels, notes DRAMeXchange.

The ongoing price declines in the market caused DRAM vendors to incur losses. Migrating to more advanced manufacturing processes and increasing the shipments of 1Gbit chips will be two key factors the can affect how DRAM makers will perform in the second half, said the research firm.

The pricing environment for the spot market remained weak, as demand remained sluggish. Pricing for DDR2 512Mbit 667MHz tumbled to roughly $2.57, while that of DDR2 eTT dropped to $2.05. In the contract market, prices fell as well as PC OEMs removed excess inventory. Contract prices of the DDR2 667MHz 512Mbyte were mostly finalized at $20 or even lower.

Current declines in DRAM contract price were bigger than previously expected. The research firm attributed this to the weak seasonality in the PC market and huge imbalance in the demand and supply chain. DRAM makers were forced to sell their chips at very low prices as their monthly capacities continue to increase.

Despite the lower inventory levels of PC OEMs today and the upcoming quarter financial reporting, DRAM demand may start to pick up.

The pricing environment for the DRAM spot market remained weak, as demand was still sluggish.
Source: DRAMeXchange

In response to the ongoing price declines in the segment, manufacturers are trying to further cut down costs and offer unique solutions.

For example, Micron recently announced its development of 1.5V DDR2 chip using 78nm process. Running on smaller voltage, the chip promises to save 24 percent of power consumption in systems. Meanwhile, Samsung and Hynix started running test trials using the 68nm and 66nm process, along with increasing the shipment ratio of 1Gbit chips for 2H 2007. Meanwhile, Taiwan manufacturers are continuing to boost the capacity of their 12inch fabs.

Flash on mobile apps
Among the four main NAND flash applications, the MP3 and PMP devices usually feature a built-in flash memory, while cellphones and digital cameras use an external memory card. USB drives are also considered a primary application as they are used extensively by PC users for data backup.

Currently, about two-thirds of the NAND flash capacity is consumed by memory cards and USB drives. Meanwhile, nearly one-third of the remaining ratio is allocated for built-in memory products, which use either the standard NAND flash or integrated flash.

For instance, in March, Samsung unveiled an 8Gbyte moviNAND composed of four 16Gbit chips manufactured by the 50nm process. Mass production of the product will begin before end of Q2.

Meanwhile, Toshiba has developed a 16Gbyte embedded flash using the 56nm process. The company will sample the product featuring eight 16Gbit chips memory in June. In addition, the 8Gbyte embedded memory that was already delivered to clients for evaluation will be mass produced in July.

Last February, SanDisk unveiled its iNAND product featuring densities ranging from 256Mbyte to 4Gbyte and targeted for mobile communication devices using microdrives.

More advanced processing and declining costs for NAND flash are attracting manufacturers of mobile communication devices to rethink their designs and to equip their smart phones, GPS, PDA and other handheld devices with embedded flash memory instead of the usual external memory cards. Meanwhile, the iPhone release in June, which will come in 4Gbyte or 8Gbyte models, is expected to spur more relevant manufacturers in switching to built-in flash memory as the storage solution.

Spot prices for different NAND flash densities continued to decline.
Source: DRAMeXchange

The table above shows a comparison of the listed NAND flash prices from the session running on April 16-23.

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