Zeev, just picked this up from the RMPro site. Who knows maybe MU can get to 25...
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Brian Gilmartin
07/09/02 02:01 PM EDT
We received our weekly update today from dramexchange.com, the research service that provides us with daily / weekly updates on the DRAM market from Taiwan, and the service details the sharp increase in DRAM prices of late. This came as somewhat of a surprise given the constant drumbeat of bad news from Wall Street, regaring the semi companies in general.
128 mb spot pricing is trading this week between $2.60 - $3.00 and 256 mb spot price is $4.85 - $5.00. (Contract pricing is a little lower for 256 mb and a little higher than spot for contract ricing.)
The weekly report details a number of other positives that they are seeing:
1.) DRAM inventories have declined to just one months supply;
2.) Although not yet confirmed by motherboard manufacturers, dramexchange says that DRAM manufacturers receiving more DRAM orders from PC OEM's;
3.) Most DRAM manufacturers considering 2nd half 2002 contract price increases;
Again, I personally was surprised by the upbeat tenor of the commentary, but for the last three weeks the service has detailed rising spot prices from the low of around $2.00.
Finally, technically the SOX, like the Nasdaq last week, bounced off of the 9/21 low of 343, thus we are watching technicals now with as much import, if not more import than fundamentals. If end market demand ever did materialize, particularly in the PC market, DRAM pricing will rise sharply, given the capacity taken out, the operating leverage at firms like Micron (MU) and the low level of inventories. However, to be honest, we have absolutely no evidence of improvement in end-market demand as yet.
long mu
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