October 15, 2009

Surprise twist: Converge reports DDR2 demand slaughters DDR3

Converge Memory Update.

In a strange twist, the spot market is experiencing a great deal of demand for DDR2 modules when most were anticipating an uptick in demand for DDR3. Spot market pricing has soared over the past four weeks for 1GB and 2GB PC800 material. The 1GB PC800 desktop module has gone from $14 in mid-September to $23 by the close of the first full week of October. Demand remains high and spot market activity has been strong, especially for the 1GB desktop and notebook modules. Although demand for 2GB PC800s does not appear to be as strong, the spot market still has managed to spike from $30 three weeks ago to an average of $43 per module by the first week of October. Converge believes the surge for DDR2 will continue for at least the rest of October and maybe even into the first half of November. We could blame “Golden Week” for the surge in price, but the bottom line is that most material comes from everywhere but mainland China. The supply channels in Asia were open but the amount of product simply was not there.

The DDR3 market still is limited in supply, but demand has not been very strong the past few weeks. Pricing has stabilized after several weeks of increases throughout the month of September. If there is any uptick in demand for DDR3, we anticipate it will occur in the next two weeks.

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