August 16, 2007

DRAM market showing modest, short term activity

The spot market for DRAM has been rather quiet, with modest activity occurring over the short term. Pricing has remained relatively stable with minimal fluctuation over the past six weeks, after a volatile month in June when prices rose significantly. Although DRAM manufacturers have successfully increased contract prices several times since June, the overall impact on the spot market has been minimal, which leads us to believe supply will remain strong. Through the first week of August, the anticipated back-to-school demand has been rather weak from a spot market perspective, and traders at Converge have not been surprised at the lack of activity in this market. As previously mentioned, the severity of oversupply during the first half of 2007 will require additional time to work its way through the supply chain. Combined with a soft back-to-school demand, we believe the DRAM market will remain unstable.

August 9, 2007

The IC Market Is Beginning to Show Signs of Picking Up

We have seen some signs in the IC market that things are picking up. We are getting days and / or weeks where the activity increases dramatically, with this activity primarily being paced by shortage requirements. The combination of the supply chain being stretched so tight and slight up ticks in demand are creating spot shortages and increasing activity. With so little of the "right" inventory in the market, the spot shortages can be difficult to solve. If the market continues to pick up as we head into the traditional build season, things will certainly get interesting.

Here are some current market trends:

Current IC shortages

  • Shortages for Maxim products continue as lead times are generally very long, stretching to 26 weeks++.
    There is increasing shortage pressure in Power Mosfets. Lead times (23-28 weeks) are stretching and direct supply is under allocation.

Embedded processors

  • Tight supply from Freescale, MCU and processors due to lead times stretching to 13-20 weeks. It may be even longer lead times for certain MPC series and, as a result, we are seeing strong demand. As for DSP products, price and lead times (8-15 weeks) remain stable.

Analog and logic products

  • Price continues to drop 5-10% due to decreasing demand and excess stock in market (including products like Commodity Amplifiers, Comparators, CMOS Single /Dual Gate and HC/HCT series.)

Passives


  • MLCC supply is stable with no shortages at this moment. Pricing pressure exists due to raw material cost increasing.No shortage for Tantalum Capacitors and other passives components. Lead times remain 6-14 weeks and pricing trend unchanged.

August 2, 2007

CPU prices are still at a premium

Premiums continue to be paid by the vast majority of mainstream desktop PC builders on at least a half dozen Intel low cost processors. For the past several weeks, processor number 925 is the most demanded CPU in the independent or open market and there appears to be no end in sight to this trend. Trading at 15% above the $70 standard, product doesn’t remain for sale for long before it is swept up and headed towards assembly lines. We expect the 925 to remain in short supply throughout the upcoming 90 days, along with the 935 and the 3.4 GB in the same stack. The 600-series continues to be in great demand and limited availabilities are being found. The 3 GB 631 and 3.2 GB 641 show the strongest demand from our global customer base at this point and speculative buys on either have been and will continue to pan out for the next quarter at least. On many Intel desktop processors currently, a good strategy is to place blanket purchase orders and at least know you are next in line when and if product is confirmed.