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The Memory Market at Year End


November was another active month in memory trading, with prices on most types of products ending the month higher than they began.

DDR2 pricing increased the first week of November, flattened out the second and third  weeks, and decreased slightly the last week. 667 materials  decreased the most, due to the falling demand of the slower speed, while 800 products held their value much better. The slight degradation of pricing can be traced to a couple of factors. The first is simple end-of-the-year softening, when OEMs are reluctant to hold inventory over from calendar year to calendar year and most of the products are bought for the holiday builds. The second is the re-entering into the market in greater amounts of the off-spec/non-major brands, like the Taiwanese manufacturers. Also in this mix is the production lost when Qimonda sold Inotera; those buyers are now shipping product from that source into the eTT/uTT and upgrade markets. The greater availability of the off brand products have given upgrade consumers a cheaper solution than the 5 majors they were basically forced to buy during the last 6 months.

DDR3 pricing saw an increase in pricing over the last month, and has flattened on most products during the US holidays. 1333 speeds are the high runners and have been lingering at a 15% premium over their 1066 counterparts. Module demand continues to increase on the PC side, as DDR3 continues to slowly replace DDR2 as the standard memory for new computers and servers.  More discrete chip inventory has found its way into the open market, as production increases at the chip manufacturers enable chips to get into the hands of the generic module makers.

DDR1 and SDRAM/PC133 continue to be harder to get as the lower densities and odd configurations head towards EOL and the manufacturing output capacity changes to more generic and newer technologies with broader ranges of use. Already we've seen popular parts configurations like 32x16 PC133 phased out without replacement from some of the major chip makers, and industrial or extended temperature tested chips are at the made-to-order stage, causing long lead times from chip makers.

Since Qimonda dissolved, Graphic DDR has been very tight, having only two viable options as vendors left, both of whom were already at full capacity and still running short of demand. However, with the normal slowing down demand of the year's end and the introduction into the market of more capacity from 3rd parties, much of the delivery issues are working themselves out. There are still some common configurations that are tight and getting premium pricing, but that also should work itself out heading into the New Year.

NAND Flash has continued to see price increases and lead time extension on most MLC and SLC large block items. November saw a 10% price increase on several sizes 8Gb-64Gb, and industrial temperature items are garnering long lead times from the manufacturers. Demand also continues to rise as NAND finds it way into new technologies and hybrid ASICs and controllers, but with capacity running as high as it can, further price hikes and longer lead times are likely to occur for the next qtr.

Overall, December is shaping up to be as active as November.  That is, at least for the next couple of weeks - until holiday scheduling has its predictable calming effect on memory trading.

Todd Banker, Memory Commodity Manager
Written on Wednesday, 02 December 2009 00:00 by Todd Banker, Memory Commodity Manager

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