September 24, 2007

Mobile Processor Activity Accelerates

Open-market production desktop CPU trading has begun to slow slightly, as heavy demand and short supply of several 900 series and older 800 series CPUs began to taper off. However, mobile processor activity has accelerated.

Currently, general CPU trading tends to be divided into three distinct areas: production desktop, production notebook, and service/repair. Due to the nature of the open market, the balancing act between these three areas is mostly dictated by supply and demand rather than industry management. Oddly enough, as any one category tends to dip, another takes off. Of late, at least 60% of the CPUs we are shipping are to notebook OEMs. Seventy-five percent of our shortage requirements are for notebook builds, and mobile processor buyers are very interested in all cost saving opportunities. As the Santa Rosa platform is marketed heavily by Intel, for example, volumes of the Napa processors, in some cases, are being traded openly at significant savings.
Overall, the increased number of older technology CPUs shipped to repair sites this summer has positioned Converge as a one-stop-shopping house for those needing older or trailing edge AMD and Intel CPUs. For example, classic Pentium processors with 100 MHz core speed were recently sold. If you are in need of obsolete hard-to-find processors or need to sell no-longer-needed processors that may be in your inventory, contact a Converge sales representative.

September 18, 2007

DRAM Prices Dip Again

Against industry expectations, the market for DRAM memory is approaching the same lows experienced back in the spring, when most thought market prices had hit bottom. Generally, August is a strong month for memory demand due to production ramp-up for back-to-school and pre-holiday builds, but the market has taken a step back and spot pricing has declined. Current spot market pricing for DRAM has dropped to $17 and $31–$32 for 512MB/667 and 1GB/667, respectively. Contract prices are expected to remain low for the first half of September, and judging by the amount of product available, Converge believes there will be an additional drop in the latter half of September.

Currently, there exists much uncertainty and confusion as to where the DRAM market is headed. Many in the industry were forecasting an uptick for DRAM memory for the second half of 2007, but it has not come to fruition. OEMs claim they have plenty of stock on hand; however, we believe they have more than needed. The spot market is running well below contract and there are no signs of any opportunity buys taking place. We still believe the market will not show any significant signs of an uptick for the remainder of the year, unless a drastic event occurs over the next 2–3 months.

September 4, 2007

Are CPUs going retro?

The CPU market is experiencing a bit of a time warp. While “retro” remains in vogue, so do the 6XX and 9XX series of Intel desktop processors, which continue to be in demand and in short supply. The 631, 641, 651, 661, 915, 925, and especially 935 and 945 processors are all being sold above direct distributor standard pricing. The heaviest demand shifted upward from the 925 earlier this summer to the 935 and 945, which have not been available in production quantities so far this month. Fortunately, while we expect the market on the 3.2 and 3.4G siblings to remain stable or climb, we have product arriving that was committed to months ago at then-current market prices. We expected the 3G 925 to trade far below today’s standard price of $80; however, demand for the part will be enough to maintain a price premium. As manufacturers migrate completely to the E-series, we expect the market on the trailing edge to fall at least to direct pricing. We also expect open market discounts on current technology to be more substantial. For example, we are currently offering the E4300, E6400, and E6600 below published direct pricing.