DRAM Memory Module Computer RAM Market Trends Prices Commentary

Folks still can care about a few things and at under $30.00 online the 2GB DDR2 SO-DIMM seems to be one of them. Online sales have been brisk on 2GB PC2-5300 and 2GB PC2-6400 SO-DIMM memory module upgrades. A reasonable investment to max out a year old notebook. Additionally, many new machines are stock at 4GB 2X 2GB new from the factory. DDR3 204-PIN SO-DIMM modules in both 2GB and 4GB  are shorter as well. In the spot market the “Kings” have always traded higher end SO-DIMM modules as they are usually short or drop faster than housing prices in Socal, yet tend to attract the better quality customers. Today there is also a bit of buzz and a few specific OEM based part number specific requirements for other DDR2 server modules. Tiger Direct does not seem to be offering unreal rebate programs pushing prices well under sub market and back door excess cost, that is a good signal as well.

Chattering is being heard around the DRAM maker water coolers about DE-COMMITTING on prices and supply to tier one computer OEMs like HP, Dell and others. With the beating the likes of Samsung, Hynix, Micron, Qimonda and Elpida have taken it seems they have perhaps pulled out the stick to draw a line in the DRAM sand in the aim of higher prices. DDR (1) is hot in the broker and spot markets, with resellers scambling to aquire 1GB Unbuffered DIMMs at prices above $30.00 for pulled, refurbished and third party modules while quotes on 1GB Unbuffered DDR2 DIMMs are $11.00 plus.It seems that finally the 64-bit Vista and hunger for larger memory has finally started to grab, to bad the DRAM guys had two years of over production.  If DRAM suppliers cut supply and claim to have no parts tier one OEMs will move to large independent stocking distributors to find supply and the market could run up.Online prices for DDR at online retailers have moved up in the past weeks. Many brokers have lost edge and or are out of the business in the past year or so, which will create less spot market speculation which will keep the cards in the hands of the DRAM makers. 

It has been a while but as those who are in the memory market can attest, the market is worse than ever.  1Gb DDR DIMM modules are below $10.oo now.  What kind of health is the market in now?  The value has moved from $120.00 in January 2007 to now sub $10.00.  All module OEMs are moving both DRAM chips and modules below cost.  Some say the market is wrecked and historically at its worst point ever.  With the global economy collapsing demand and flooded excess markets the ability for average selling prices to rebound seems bleak.

“This new technology has the potential to deliver improvements in our productivity and cost per bit that are unprecedented in our company’s history,” said Kin Wah Loh, President and CEO of Qimonda AG. OK AGREED, THEY’VE LOST MONEY AND WANT TO IMPROVE PROCESSES, BUT TODAY 64X8 QIMONDA CHIPS ARE AT .95EA.  HOW MUCH SHOULD THEY BE? .25EA??? “We are the first in the industry to unveil a DRAM technology roadmap down to the 30nm generation, enabling cell sizes as small as 4F(2). The introduction is the result of our continuous innovation as a leader in the development of memory products. This step also opens up further partnering opportunities.”  THE COMPUTER MARKET IS STALLING AS IT IS….  NEW MACHINES ARE STOCKED WITH 2GBS OF MEMORY, DO WE NEED SMALLER CHIPS, BETTER COSTS OR IS THIS JUST A RACE TO REDUCE COSTS IN AN EFFORT TO TRY TO MAKE MORE MONEY?  THE HEALTH OF THE DRAM MARKET IS SUSPECT AS IT IS.

Qimonda targets to start mass production of 46nm Buried Wordline DRAM technology in the second half of 2009. This node will offer more than twice the bits per wafer over the company’s 58nm trench technology.  OH YIPPEE MORE PARTS THEN WE NEED… The company expects an additional one-time investment of approximately Euro 100 million in total during financial years 2009 and 2010 to convert its existing in-house trench capacities to the Buried Wordline technology, which it expects to finance from its cash flows. TELL ME HOW THEY ARE INVESTING WHEN THEY ARE LIGHTING DOLLAR BILLS ON FIRE AS IT IS.  This relatively low level of additional investment is possible by leveraging a combination of Qimonda’s Buried Wordline and lean manufacturing process with a mainstream stack capacitor.

FUNNY VERY FUNNY ERRRRR, NOT

The past few weeks is more of an idication of the growing changes in the computer memory market. eTT chips are their own market. Used for mostly low cost upgrade solutions and made with x8 chips, these are always under pressure as the Taiwanese DRAM makers over produce and have zero access to the tier one computer companies demands. Mostly used in China and remarked with major brand names and house brands.

Original factory UDIMM and SODIMM markets are changing with the times. Desktops are on the decrease in demand while notebooks and mobile computers are driving the market place.

Registered and FBDIMM too have an entire market structure. This market has gone up recently while the tougher to procure x4 chips have remained the manufacturers last stand in the dumping wars. eTT and uTT components do not cloud this market and again black top or OEM marked 4gb FBDIMMs are not exactly what HP is using these days.

Niches exist across the board in regards to specification and brands. Each market within this one memory module market is going its own direction and has its own unique demands.

The fourth-quarter net loss for Hynix was 467 billion won ($493 million), compared with a record profit of 1 trillion (yea DRAM guys ran it up) won a year earlier. When their 64×8 MHz chips are seen at prices as low or lower then eTT based components no wonder, dah…

The material guys over at Micron say it is a good idea.  Samsung would have a direct market path for their flash memory products under the Lexar name and a business model for promoting Samsung based memory modules.  A failed MyMemorystore.com may have earned Samsung valuble insight into the enduser markets along with a proven name in the memory module market Crucial Technology might make sense.

The details and motives are very interesting indeed…

Every year in the DRAM and memory markets Chinese New Year comes and goes.  Normally, this is an excuse for the market to be slow and this year is no different.  So for now, we are in the wait and see mode, as the market will wait upon the return of workers in China and other areas celebrating this holiday.  Meantime some companies will cash out to pay bonuses and their bills if they are small, while stock levels may dry out in companies where their vendors are enjoying the holiday, thus sometimes causing shorter supply over the next week or so.

One thing is for certain, if there was steady demand, business would be as usual as the DRAM and memory markets ignore all holidays when it gets hot.

Most news accross the internet and in print written about the 2008 DRAM, (as late as mid January) market first quarter was described as, “bumpy”, “tough”, “stuggling” and “difficult.” The 15th of this month showed price increases in the spot market. Many forecasts reported January to be sluggish and still declining. So far prices have rebounded and come up from the grave. While reporting focus is narrow and only on the benchmark products of two chips, 64×8 and 128×8 as well as 1GB modules. Understanding this is the easy to report mainstream high volume segment there is little reporting on server memory, higher capacity modules and the components to build them. The DRAM market is segmented into many different product lines, grades, and capacities. Some folks should look at aspects of the entire DRAM market as they report. Many distributors of DRAM and modules are segmented as well. Some selling only server memory and some selling only lower end easy to assemble commodity products. Check out the latest product offering from Samsung or Qimonda on components and modules, it is pretty diverse. It is unlikely that so much pessimism would be floating in the blogs of the gurus if they knew the market inclines on these not so easy to track components. Our opinion is non commodities will rise and the bread and butter may follow. Let us see what 1H February contract prices do, shall we?

If we are all riding on the memory roller coaster, are reporters and analysts sitting in the front, back or in the caboose?

The memory and DRAM industry is a rather large and complex market.  With many companies, ideologies and factors driving it, DRAM Talk is long over due.   Watch for our offering of comments, rants and raves, intelligence, rumors and speculation about the several billion dollar industry.  We welcome all comments and opinions to our posts and appreciate the opportunity to offer ours…

Sincerely,

DRAMTalk.com