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Electronics Production | December 28, 2009

DRAMeXchange: Expected shortage on DRAM in 2H10

With the recovering PC shipment at 2009, DRAM shortage had accelerated since August and reach at the peak in October.
Some PC-OEMs even spent US$55, 1Gb for US$3.25 equivalent, for DDR2/2GB module from module houses at spot market. Despite with the shortage ease in November and December, most PC-OEMs and PC-ODMs still indicate the strong shipment momentum while this situation resulted in the flat DRAM contract price during the periods.

According to DRAMeXchange, CAPEX for DRAM vendors will increase 80% YoY to US$7.85B from US$4.30B in 2009. However, this amount is still below the low CAPEX level at 2001~2003. The research firm expect, the CAPEX will likely grow to the level of US$10B-$12B in 2011~2012. DRAMeXchange think the DRAM market will be more balanced in next two year given the discipline CAPEX enhancement, recovering PC shipment and other DRAM application growth. DRAM vendors can maintain their operational profitability.

According to DRAMeXchange, 1Q10 DRAM aggregate demand will be slightly below aggregate supply, and the DRAM prices will appropriately fall 10%~20%.

DRAMeXchange predict that the DRAM will likely face serious shortage in 2H10 triggered by the hot PC sales and PC-OEMs may pull up the inventory level in 2Q09 to handle the shortage for 2H10. This situation will result in the warming up effect for slow season in 2Q10. DRAM price decline will likely be eased in 2Q10. That is, DRAM vendors will have great opportunity to remain profit for whole year.

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