In October as well as in previous months, this market seemed to have gone through the stormy days. Even the prices were in a stupor, against the background of minimal shipment quantities. The regularly chanted mantra, “The user doesn’t need such capacities and speeds”, is starting to work at last. The average price for a 256MB DDR400 chip remained at the point of $4.6-4.7 throughout the month. The price would go down by about twenty cents in the per-day graph, but it got back anyway by the end of October (these are purely traders’ activities, though, having nothing to do with the global market situation). The price of 266 and 333MHz chips is following the old trend: the average prices for 256MB chips went up by 5-10 cents in October, getting more closely to the DDR400 ceiling. On October 30, they were $4.49 and $4.54, respectively.
But if the intrigue has gone from here, it should appear somewhere else, shouldn’t it? I mean we are at an exchange and the traders have to earn their living by shuffling the prices about. It was the good old PC133 SDRAM that moved the market on in October. One 256Mbit chip of such memory costs now $4.95 compared to $4.6 at the beginning of the month. This is already more than PC3200 DDR costs! It cannot be avoided, though. The demand for SDRAM is still higher than for DDR, while the supply is low. The chip manufacturers overestimated the market of high-performance PCs, but neglected the household appliances field where SDRAM is a wanted product today. Underestimation provoked the deficit we witness today.
Considering the “back-to-school” season brought about no agitation and, consequently, no price growth, we can extrapolate this for the Christmas season ahead. We will hardly see any significant growth of the demand for memory. Since the memory makers are trying to get their financial results up by throwing more of their products into the market, we are more likely to observe a reduction of DDR SDRAM prices in November.
By the way, how have our manufacturers been doing? This October was a month of both joy and sorrow to the Taiwanese. Nanya and ProMOS calculated their sales results for September and found them to be lower than in August because of the price reductions and the deteriorating demand. The same ProMOS with Winbond and Powerchip were on the successful side returning back to profits, according the third quarter results. Nanya is not included. The ex-locomotive from Taiwan is in a slight minus. However, Nanya is said to be getting an order for memory from the NEC computer division. This may be well for Nanya’s sales. It was actually very interesting that NEC approached Nanya for memory instead of NEC’s own daughter company, Elpida.
Elpida has been somewhat unlucky recently. ProMOS managed to get along without Elpida in building its second 300mm fab, notwithstanding the signed memorandum for mutual understanding and cooperation on 0.10micron and finer production technologies. The Taiwanese preferred two unnamed-yet partners instead.