January 22, 2009

PATA interface continues to command higher pricing than SATA

Converge Storage Update

3.5" Drives
Demand and sales volume decreased significantly during the second half of December 2008. However, this trend has reversed in early January, although pricing continues to decline. Direct cost on the 1 TB HDDs is approximately $100, while the 750 GB capacity is in the low $80 range. This sharp decline, quarter over quarter, has impacted open-market pricing on all lower capacities. The 500 GB, 400 GB and 250 GB can be found at $45, $37 and $28, respectively. The 320 GB is not readily available. PATA interface continues to command higher pricing than the SATA interface, at $2 to $3 per drive. Although we are seeing volume sales, it is opportunity and price driven.

2.5" Drives
Converge has seen increased activity in the 2.5" market. This activity is specific to the SATA interface in the 160 GB capacity and higher, and is part number driven. For example, most of the requirements we are receiving are for the Toshiba and Western Digital brands. Otherwise, the market continues to decline with little speculative purchases. Outside of the demand-driven market, pricing for the SATA interface can fluctuate widely because many integrators need to purge excess inventory. There is little change in IDE pricing, month over month, in the 80 GB capacity and higher. Meanwhile, pricing for the lower capacities has dropped significantly, with 20 GB, 30 GB and 40 GB HDDs selling at $16, $19 and $22, respectively.

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