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Components |

1HDec. DDR34GB contract price decreases by 6%

1HDec. DDR34GB contract price decreases by 6%, 2GB spot price falls below USD 0.9.

According to DRAMeXchange, a research division of TrendForce, as the effects of the Thailand flood disaster on the HDD industry linger and the traditional slow season for PC shipments has arrived, contract price for 1HDec. remains on a downtrend. Average DDR3 4GB price fell to USD16.5, a decrease of approximately 6%, while average DDR3 2GB price reached USD 9.25, a near 3% decrease. From the market perspective, with the holidays around the corner, European and American clients are returning home mid-month; thus, contract price negotiations were concluded in 1HDec. The Asia market will continue to negotiate prices twice a month, but with significantly fewer concluded transactions compared to November, contract price is still on the downtrend. However, as many DRAM makers have announced production cuts, the price decreases have shrunk slightly. The results of the capacity cuts should be seen in 1H12. Thus, although the DRAM market will remain in a state of oversupply for the rest of 2011, the outlook is optimistic for 2012. Global DRAM wafer start volume approaches 2008 financial crisis low, 21% decrease in 2011 The global DRAM industry was affected by the March 11 earthquake in Japan, but DDR3 4GB price recovered to USD 36.5 in May. However, DDR3 4GB contract price has been on a downtrend since then, arriving at USD 16.5 in December, a 55% decrease. As a result, many DRAM makers are cutting capacity or transitioning to foundry business. According to TrendForce statistics, global DRAM wafer start volume has fallen from the high of 1500K starts per month in 2008 to a forecasted low of 1'000K starts per month in 2012, representing a decrease of 33%. Furthermore, December wafer start volume is approaching the lowest volume reached during the financial crisis in 2009, 986K starts per month. Taiwanese DRAM makers have made the largest capacity cuts, from a high of 450K starts per month in 2011 to December’s 250K starts per month, a 44% decrease. From the supply and demand perspective, after the second round of production cuts in 2H11, the forecasted sufficiency ratio for the global DRAM industry in 1H12 has been adjusted downward, from 17% to 13%. Additionally, capacity cuts were all on commodity DRAM products. Thus, the severe oversupply situation is quickly improving, and the industry is headed towards balanced supply and demand. As for price, DDR3 2Gb spot price is also nearing the financial crisis period low of USD 0.6. Although shipments are affected by the down season and the flood disaster in Thailand, as the contract price downtrend has eased slightly in December, in 2012 DRAM price may have an opportunity to recover, allowing the DRAM industry to gradually emerge from its currently gloomy situation.

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March 28 2024 10:16 am V22.4.20-2
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