Following the speculated DRAM production issues on 66nm process node at Hynix Semiconductor, rival Samsung Electronics is also said to have a large batch of DRAM chips being rejected by customers. Industry players are worried that this batch of defective DRAM will be dumped on the spot market and aggravate weak pricing further.
Unstable yields on 66nm process node resulted in a batch of scrapped wafers (in 1Gb density) at Hynix in early April, according to industry sources. Samsung is also said to have encountered problems in production, with the sources indicating that a batch of 80 million 1Gb-equivalent DDR2 chips fabricated on 68nm were rejected by PC OEMs recently.
Sources at downstream customers expressed concern about how Samsung is going to deal with this batch of defective DRAM chips. If Samsung resorts and then dumps this batch of chips at low prices on the spot market, corresponding pricing will be severely impacted, they said. They added that they have not seen Samsung make a concrete decision yet.
The sources noted the harsh environment of the DRAM spot market, as the market only accounts for 10-20% of global DRAM capacity, down from 30% in the past. The shrink stems from the extending influence of notebook and desktop PC replacement, they explained.
According to DRAMeXchange, the transaction volume on the spot market is low recently. The memory-trading firm projects that the spot price of 1Gb DDR2 chips will only grow by 10-15% in the third quarter as inventory is relatively high. Prices should peak during August and September, the firm added.




