DRAM Memory Module Computer RAM Market Trends Prices Commentary

Tuesday of this week offers of 64×8 667MHz were $1.02 for Elpida (500K) and $1.07 for Nanya (50K), sizable chunks of chips considering the past week market was as hot as it has been this year. Original 1GB 667MHz UDIMMs were below $17.50. These offers surfaced in the U.S. Depression and dis pare were more abundant then true demand.

Wednesday those chip offers seem to clear up and rumors of Samsung stiffing Arrow Europe on an alleged one million dollar credit note, rebate or whatever you want to called it, based on a price protection program the two sides agreed to. Arrow allegedly continued to buy all year and in January the chip and dips hit the fan. A key Samsung European distribution manager quit as Samsung turned their back on him. It is unclear the conclusion of the story at this time, but evident that Samsung stiffed another customer and rotated another management position. Meanwhile end of the month billing on older price structures and are simply not happening. Samsung is under no pressure to move parts and is not motivated whatsoever. They showed and end of month push list that was void of 1GB 667MHz and 800MHz modules.

The month still is still hours away from being over in the U.S. and Qimonda seems to barking about raising prices as well and little has leaked in the way of anything that would be a deal from Micron.

Elpida and Hynix may as well join in with the ranks for Mira, as they can not seem to hold their water this past week. Mira parts traded at $2.02 and $1.02 in Asia last night. Hynix seems to be booking large DDR1 orders at sub market prices on finished goods such as 1GB PC2700 SODIMMs below the other CHIP OEMs. In the meantime, Elpida 64×8 667MHz seem to be less then eTT priced chips on some offers.

800MHz still a great bet…

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.

Activity across the spot has been flat the last week for small brokers and eTT traders. Considering lack of demand prices have held in our point of view. Last night in Taiwan traders were willing to stock at $1.03 and $2.03 on 667MHz while Mira offered $1.10 and$2.20. Samsung original memory module offers have been less each day while there is healthier demand from top computer OEMs with open purchase orders for 512MB and 1GB UDIMM 800MHz. Qimonda and Samsung seem to be on the hold for any month end push while Micron has drastically raised 128×8 667MHz finished module prices.

Rumors of inside guide line prices are $20.0 and 22.0 for 667MHz and 800MHz 1GB UDIMMs at Samsung.

Monday morning update 7:45AM: Mainstream brokers and distribution were unable or not interested in filling this order.

Monday morning 12:59PM

Samsung M470T2953EZ3-CE6 (64X8 based) SODIMM 667MHz 1GB 5K pieces needed at $18.50 Target Price

Samsung M470T5663CZ3-CE6 SODIMM (128×8 based) 667MHz 2GB SODIMM 2K pieces needed at $43.00 Target price

If demand is weak, we should see these kind of prices available when the U.S. market opens.

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 pursuit of speed and power show us a recently new added 800MHz specification in the DDR2 speed and product line found in the new Mac Pro 8core from Apple.  These along with increased CPU size allow for some MAC applications to run twice as fast.  The 800MHz FBDIMM is also found in PC specification versions as well.  The fact that it coincides with the market up tick it, this product line has become tight.  In the spot market chip supply is short and demand is good.  Both the 128×8 and 128×4 800MHz have made good gains in the past weeks both in eTT and OEM true branded chips.  Interesting it will be, if the CHIP OEMs keep them tight (wondering if they really have them, we need to find out) and we shall all see if it can and will drag up the more supplied speed of the 667MHz.

Qimonda (NYSE: QI), based in Germany said it lost 598 million euros ($879 million) in the quarter.  The losses equate to 1.75 euros ($2.57) per diluted share.  Last year, Qimonda posted a profit of 177 million euros, or 0.52 euros per share.

The talk on the street is that Qimonda has a bright outlook for 2008 and has taken it’s bath in red ink and is ready for recovery.  Memory module original prices were in their lowest valley in mid December of 2007 while today prices have rebounded about 30% on the ultra tight market product group of the 667MHz 1GB DIMM and SODIMM.  Early January prices and pick up in demand for FBDIMMs and RDIMMs has also seen prices rise above the, six feet in the dirt prices, from December 2007.

Production has been cut in factories at Qimonda as well as other chip makers and they key question is, can they continue to burn cash to compete in the market and stay alive?  This question is kicked around at all DRAM OEMs these days rest assured.

It is a Sunday morning now and Friday trading both in the U.S. and Asia were flat but prices in the spot market remained higher then a week ago. Registered and FMDIMM demand is showing early health though as DRAM OEMs still claim that prices are on x8 products and commodity module are firming. Well… except Hynix perhaps.  For key traders and module OEMs, Hynix has supported aggressive target prices as of late.  They could keep the market from climbing.  Qimonda, Micron and Samsung on the other hand, remain opportunistic about Q1.  Dell and HP have less then two weeks of inventory on the shelf but with Chinese New Year quickly approaching, market sediment is unclear in the short term.  eTT parts such as Mira seem to be soft as well in Asia, while the bright spot in the market is DDR2 800MHz.

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