Despite rising contract and spot DRAM prices, analysts, DRAM module makers and distributors all remain conservative about the DRAM market this quarter.

Prices for 256Mbit DDR effective tested (eTT) chips have risen to US$2.49, up from US$2.04 last week, while contract prices have risen 5% to US$2.61, due to decreased supply in both markets and stronger demand from China, according to DRAMeXchange and DRAM distributors.

However, although the DRAM market is showing signs of recovery, Frank Wang, an executive director with Morgan Stanley in Taipei, was quoted by the Chinese-language Economic Daily News as expecting DRAM contract prices to fall 5-10% this month.

In addition, Wang pointed out that despite the recent rise, DRAM prices have fallen more than 30% since the start of this year, and the major Taiwan-based DRAM makers, including Powerchip Semiconductor Corporation (PSC), Nanya Technology may all report losses this quarter.

Taiwan-based DRAM module makers and distributors also remain doubtful about the DRAM industry this quarter. The second quarter is the traditional slow season for the DRAM industry and DRAM demand has not significantly picked up, the companies were quoted by the Chinese-language Commercial Times as saying.