Supply tightness is being experienced in the passive sector

The market for general ICs also remains unchanged since our September Market INsights update, with the exception of some increased supply tightness in the passive sector, where some high CV caps are once again experiencing extended lead times.

The following parts may be experiencing shortages and delays in the following areas:

- Converge is still observing spot shortages in the MPC family of Freescale processors, especially with the MPC 8260, 8270, 7410, 860, and 755 models.

- The availability of the TI/Burr Brown INA, OPA, and DAC family of op-amps remains tight.

- Some Broadcom part numbers remain in short supply, such as BCM5708 and BCM5241. The lead time for Broadcom parts has increased to 12–16 weeks, compared to the 8–10 weeks previously reported.

- Converge has experienced an increase in inquires for Intersil devices over the past week. Lead times have extended to 12 weeks, from 6–8 weeks earlier. Part numbers in demand include ISL6612, ISL6310, ISL6526, and ISL6566.

In Asia, demand has slowed due to China’s Golden Week holidays. The market is currently experiencing supply tightness on passive components such as capacitors; however, buyers are conservative on pricing and are unwilling to pay a premium on the open market.

Shortage of 80 GB desktop HDDs continues

Desktop Drives
The shortage of 80 GB desktop HDDs continues. Distribution pricing for 80 GB SATA and IDE HDDs is currently $40–$41, with limited availability. As a result, we are observing a spike in demand for the higher-capacity HDDs, especially 160 GB SATAs, with prices trending higher across the board.

Notebook Drives
Demand at the production level remains in the 80 GB to 160 GB SATA 5400 RPM range. There is no apparent shortage and activity is steady. The lower-capacity drives remain liquid in the 20 GB to 60 GB range. There is little price difference between 20 GB and 30 GB capacities. This is also true for 4200 RPM and 5400 RPM speeds of a same-capacity HDD. Generally, pricing has remained constant month to month.

Server Drives
We continue to see increased demand for 250 GB to 500 GB SATA HDDs for enterprise applications. Therefore, activity in the SCSI market is light. Open-market pricing discrepancies among different brands is growing, with Seagate carrying a premium.

Memory Update

The DRAM market is not showing any signs of a rebound after prices reached a new low at the end of September. The spot market was flooded with available parts, but there were not many buyers – even with pricing well below direct. In contrast, we observed prices for a 1 GB/667 desktop drop to $21 and for a 512 MB/667 to $13. We now believe that pricing concerns no longer drive the current state of the DRAM market. Converge believes the PC OEMs are still trying to utilize their higher-priced inventory, and although spot-market pricing is tempting, demand is not strong enough to warrant open-market buys at this time. Adding to the market woes is the desire to no longer hold inventory, which is keeping plenty of supply in the distribution channels.

China’s Golden Week holidays had no overall impact on pricing. In fact, the complete opposite occurred and the market moved at a crawl. These are all bad signs for the DRAM market for the remainder of the year. Fortunately, October is a long selling month. Although Converge does not believe there will be any significant upside in the final three months, based upon the time of the year, we hope there will be some positive market signals before the major holidays are upon us.

CPU Update

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.