November 26, 2007

Storage Update: Tracking current storage trends

Desktop Drives
The demand for 80 GB through 400 GB HDDs remains strong. This is true for both the IDE and, especially, the SATA interfaces. The 80 GB pricing has increased month over month, with limited quantities available at $43–$45 each. Meanwhile, pricing for 750 GB and TB drives is on the decline.

Notebook Drives
We continue to see regular production requirements for 80 GB to 160 GB 5400 RPM SATA 2.5" HDDs. Customers are seeking cost-savings opportunities, as product appears to be readily available in the market. However, demand for the PATA equivalent of the aforementioned capacities is tapering off. There is still significant activity among the lower-capacity drives in the trailing-edge and wholesale markets. This is especially true of the 40 GB and 60 GB capacities in both the 4200 RPM and 5400 RPM speeds. Mobile HDD in the 10 GB capacities and lower are slow moving, primarily with part number–specific demand in the service space.

Server Drives
There has been little change in the server market since our report last month. The migration from SCSI HDDs to SATA HDDs continues, with the 250 GB through 500 GB capacities remaining the most widely consumed. Activity around SCSI HDDs is most prominent in the service space.

November 20, 2007

Memory Update: A disappointing year for the memory market

As we approach the end of 2007, we reflect back upon a disappointing year for memory and a holiday build season when the market never gained any strength or momentum regardless of the numerous predictions about a possible turnaround.

Looking back, there were high expectations coming into the year, especially after 2006 finished with record highs for memory prices in the contract and spot markets. Once the 2006 holiday season passed, the market went into a pricing free fall. Aside from a brief uptick occurring in the middle of the summer of 2007, which we feel was based more on pure optimism than on true demand, the market has become one of the worst since the early days of fast page mode technology back in the mid 1990s.

Overcapacity by DRAM manufacturers is one major reason for the current state of the market. Many manufacturers were forecasting a big year in 2007 due to the release of Microsoft® Windows Vista® operating system. Various articles published in numerous publications late last year quoted many high-ranking representatives from Samsung, Hynix and other DRAM manufacturers alluding to Vista being a make-or-break platform for DRAM throughout 2007. Fast forward to November and the only mention of Vista is, “There’s always 2008.”

Without support from the corporate sector spending on new systems, the market has remained in a severe oversupply situation throughout the year. We are once again in a situation where pricing is no longer an issue. Pricing has been stable for a few weeks now with 1GIG DDR2 around $20 and 512M DDR2 at $11. Both are at a level that DRAM experts would never have anticipated, not now or at any point during the last 11 months.

As we wrap up the final months of the year, we look to the future and say, “There’s always 2008.”