March 18, 2009

Is the memory market back at the bottom?

Converge Memory Update

Is the memory market back at the bottom again? After a brief uptick in DDR2 pricing, the market has quickly fallen back to trading in a price range not seen since the pre-Christmas holiday season. Contract pricing remains flat while DDR3 contract pricing is on par with DDR2. Spot market pricing for 1 GB modules is in the $8-$9 range while pricing for 2 GB modules is in the $16-$17 range. Whereas activity in the spot market for DDR2 has become nonexistent, pricing for DDR3 is still much higher than contract prices. Converge believes that this is a result of vendors being stuck with higher-priced inventory that experienced the sudden and steep contract price reductions that transpired over the last few cycles. Currently, the outlook for DDR2 and DDR3 remains flat, while the market will most likely remain at current price levels for the next several months.

The SDRAM market continues to show strong activity. Pricing continues to move upward, although not at the pace experienced during the first two months of the year. Currently, we do not forecast any slowdown in this activity. Demand remains high, and the transaction volumes remain steady, with Samsung, Qimonda and Elpida the three main manufacturers experiencing the most product requests.

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