DRAM oversupply may ease
According to DRAMeXchange, DRAM spot prices declined sharply last week, where branded chips fell through the USD 2 level. DDR2 512MB 667MHz slid to USD 1.98, while DDR2 eTT dropped to USD 1.57. In a single week, the WoW decline in the spot market amounted to 22.3%. With prices showing no signs of a turnaround, buyers are in no hurry of making a deal, which has further weakened the already sluggish market conditions.
Despite the current market conditions, Samsung maintained its upbeat sentiment toward the memory market during its global investor conference in early May. In response to the plummeting price declines, it has increased the ratio of its specialty memory products from 25% to 35% in 1Q07. Furthermore, the more recent capacity expansions are no longer allocated to the production of DRAM. Aside from Samsung, other DRAM makers, such as Elpida, Powerchip, ProMOS, and Winbond are searching for solutions in handling their less cost-effective 8 inch fabs, while others are rolling out more specialty memory products, or boosting the production of the better-priced 1Gb chip. DRAMeXchange analysts forecast that these new measures may help slow down the DRAM capacity expansion, and alleviate the current DDR2 oversupply problem.
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