Converge Storage Update
The 3.5" market has been trending in the same direction month after month. Slow sales and inventory surpluses continue, which are contributing to additional price declines. This is most evident, but not limited to, the PATA interface. The result is compact pricing in the lower capacity HDDs, with only a few dollars separating the 80 GB through the 250 GB IDE HDDs. Further, it has been reported that direct pricing for the 750 GB drives has dropped to the low $90 range. The impact is being experienced in the higher capacity HDDs, specifically the 400 GB drives, where products can be found in the low $40 range on open-market excess buys.
The 2.5" market is falling in line with the 3.5" market. The once slower, eroding IDE interface is beginning to experience sharper price declines. The 40 GB drives are trading in the high $20 range, while the 80 GB capacity is in the mid-$30 range. Meanwhile, there are little if any speculative buys occurring in the SATA interface. There does remain part-specific demand and with that comes premium prices; otherwise, buyers are seeking aggressive price points to stock 2.5" SATA HDDs.
November 20, 2008
Converge Storage Update
Posted by Converge at 9:28 AM
Converge General IC Update
October was relatively active given the overall market conditions. While there were no major shortages in the market, there continue to be some spot shortages among various manufacturers. The one area that appears to be impacting customers the most is the series of Freescale PowerQUICC processors. Of that series, the MPC82xx seems to be the item that is causing the most problems. Many customers are experiencing issues, and lead times have been stretched out to 18–20 weeks.
Other products experiencing spot shortages include Micrel, NXP and some connectors. However, these shortages are not currently having a noticeable impact on the market.
We have been tracking some spot shortages on tantalum capacitors, but the activity is very sporadic. One area that has slowed a bit is military diodes. There was quite a bit of activity in this area over the past year, but it appears to have subsided.
Overall, it will be interesting to see how the market reacts to overall global economic conditions as we head toward the end of the year. November and December are short months due to holidays and, with the economic slowdown, there could be forecast fluctuations. This could present some good buying opportunities in the market for customers taking advantage of market supply and pricing.
Posted by Converge at 9:01 AM
Converge CPU Update
In October, the spot market braced for the traditional pre-holiday rush on CPUs, but this has not yet materialized. Instead, we have seen slowing demand as a strong US dollar and lower consumer spending has tempered demand in the CPU market.
The positive news for OEMs is that pricing has softened considerably, especially on Xeons and TJ Montevina models, with a reduction of 10% or more on several models (T5800, T3200 and E8400, for example).
October also saw a planned price drop as mainstream desktops were discounted—including the Q8200, E7400, E2220, E2200 and X3220 models. Meanwhile, pockets of aggressively priced mobile CPUs, such as the T9500, can be found with pricing at $100+ cost savings per piece.
Xeons fill the gap
Intel server chips have returned to the forefront, as older parts such as the X5140 are providing good value. Meanwhile, Intel has launched up to 20 new models between September and November, thus considerably extending its current range of chips offered.
End-of-life models in demand
Half of the demand currently tracked for mobile CPUs in October was centered on older, trailing-edge technology. Desktop models such as the E2160, E4500, E4600 and E7200, and the mobiles T7250, T8100, T7200, T5550 and T2370 have all enjoyed resurgence in demand.
In November, Intel launched the new range of i7 desktop CPUs codenamed Bloomfield. There are three models and the pricing runs from less than $300 to almost $1,000 for these Quad cores. These CPUs are targeted toward “gamers” and should attract strong interest in the first several weeks on the market.
We also expect holiday market demand to increase, as current signs are encouraging with rising day-to-day requirements being filled by Converge. OEMs should be actively searching for open-market savings as a slow start has left weaker pricing than usual for early buyers to take advantage of aggressive price points to fill demand.
Posted by Converge at 8:54 AM
Converge Memory Update
While it appears pricing has finally stabilized in the DRAM market, there are still no signs of demand. Contract pricing has caught up to pricing in the spot market and both are essentially at parity. 1 GIG 800s modules have been stable in the $9–$9.50 range for the past few weeks; 2 GIG 800s modules have settled around $18. Although pricing has leveled off, supply remains plentiful. Most vendors are open to offers, but the market has reached a point where pricing is no longer a factor because demand remains soft.
Due to the holiday in the United States at the end of November, Converge believes DRAM manufacturers will look to get an early start to move inventory for the month-end push. If there are going to be any spot market opportunities, they should occur the week before Thanksgiving.
Posted by Converge at 8:51 AM