| A 15-hour power outage accident occurred in HNSL (Hynix Numonyx Semiconductor Ltd.) from 11:30 A.M. on May 19th to 2:30 A.M. the next day due to a problem in the power transmission facilities in the Wuxi Export Processing Zone. Hynix believes the overall impact to its whole operation should not be severe since the emergency power supply system was activated instantly. However, the real impact is still under evaluation.
Currently, HNSL runs two fabs in Wuxi - one is 8-inch fab and the other is 12-inch fab. The 8-inch fab houses a monthly capacity of 50,000 wafers with production being focused on consumer DRAM, DDR and SDRAM. The 12-inch fab mainly focuses on commodity DRAM production. Despite that the amount of affected capacity is still under evaluation, industry professionals express that any power suspension for over two hours could affect an amount of output equivalent to one week??s capacity on average and two weeks if severe.
DRAM contract price to up by another 5% in 2HMay; 1GB module leads appreciation by 20% since March.
DRAM contract price for 2HMay is still being negotiated . As DRAM makers have successfully raised their quotes by 10% in 1HMay, some buyers have already requested to freeze the quotes for the entire month. However, for those buyers who are still undergoing price discussions, channel checks show that most DRAM makers tend to propose a 5-10% increase.
The price of the mainstream DDR2 1GB module has appreciated by about 20% (from US$17.50 to US$21) after experiencing a price correction during 1HMar to 2HApr. While DDR2 1GB part takes the lead in terms of price increase, the price of 2GB module also posted a 10% appreciation (from US$40 in 1HMar to the present US$43) in the same period.
DRAMeXchange attributes the price rebound during seasonal downturn to a structural change in supply. Since Hynix has only reached its supply bit growth of 5% in 1Q08 and Qimonda posts a negative shipment bit growth of 9% in the same period, those buyers who bring forward their pre-stock procurement after seeing a guaranteed upward price trend thus spurs demand.
The price of $2 has become a consensus price bottom for DDR2 eTT 1Gb.
The spot price of DDR2 eTT 1Gb again dropped below US$2 on May 15 after being stable for two weeks. During the week May 13-19, the price of DDR2 eTT 512Mb down 2.9% at US$1.02 and price of 1Gb down 4.9% at US$1.96. In the branded chip segment, the price of DDR2 667MHz 512Mb down 1.0% at US$1.04 and the price of 1Gb down 4.0% at US$2.18.
Transaction was relatively weak last week, with price of DDR2 eTT 1Gb once dropped to US$1.96 level. Yet, the downward trend is short-lived as most industry players have reached a consensus that US$2 should be the price bottom. Some industry players have observed that back-to-school demand has emerged. As DRAM makers are more disciplined over expansion and capex, a healthier price trend thus becomes foreseeable.