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DRAM, NAND prices to jump in May
  Contract prices for memory, including DRAM and NAND flash, are expected to rise in May despite the downturn in the segments, according to an analyst.

Contract prices for DRAM could jump by up to 10 percent in May, said Daniel Amir, an analyst with Lazard Capital Markets. ''NAND contract pricing could increase 10-to-15 percent in May,'' he said in a report.

In NAND, vendors are seeing a major downturn. But there is some relief, as contract pricing could increase this month.

''Most NAND densities have seen spot prices increase in April for the following reasons: 1) Apple repurchasing at Samsung and Toshiba; 2) capacity reduction from Hynix 8-inch fabs in 2Q; and 3) limited supply of 8-Gbit coming out of Samsung 8-inch capacity,'' he said.

Some companies will see better pricing than others. ''We expect Micron to see the biggest contract price increase (15-to-20 percent), while Samsung is likely to see flat pricing (5 percent),'' he said.

''NAND supply remains an issue with Hynix. With Hynix reducing its 8-inch NAND capacity, we see the company losing significant market share in the next few months,'' he said. ''We estimate that 70 percent of its capacity is on 8-inch with much of it becoming obsolete by year-end. In addition, our channel checks indicate that the company has begun to transfer wafers from NAND to DRAM where its cost position is better.''

DRAM price hikes?

For the most part, the DRAM market is in the tank. Except for Samsung Electronics Co. Ltd., DRAM vendors have been swimming in red ink amid a downturn in the sector. Elpida, Hynix, Micron, Qimonda and the Taiwanese vendors are all lost money in DRAMs.

But like NAND, there is some relief for vendors, as pricing has become firm or has increased in some cases. Last month, Japan's Elpida Memory Inc. and South Korea's Hynix Semiconductor Inc. raised their DRAM prices.

Look for higher DRAM prices in May. ''Our channel checks indicate that first-half contract pricing is up 5 percent. Customer inventory continues to be in line with expectations as demand gradually picks up due to increased seasonality in the PC market,'' Amir said.

''We expect further price increases in DRAM in the second half of May of at least 5 percent,'' he said. ''We believe that Samsung has taken the approach of stabilizing DRAM pricing though still keeping it at close to cost level in order to put pressure on its competitors.''
release time :2008-5-6
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