March 18, 2009

Pricing for 500 GB - 1 TB HDDs continues to fall

Converge Storage Update

3.5" Drives
Demand for 3.5" IDE and SATA HDDs in the open market continues to follow February’s trend. The 160 GB through 400 GB capacities are liquid and moving in volume. However, Converge believes that low price points and excess stock are the driving forces, as opposed to increases in production. Currently, only $1 to $2 separates HDDs in this range. This holds true for both SATA and PATA.

While pricing has remained stable for the aforementioned capacities, pricing for the 500 GB through 1 TB HDDs continues to fall. Looking back to last year, we saw a 30%+ decline in direct pricing for 1 TB devices from Q3 to Q4. With current 1 TB price points in the low $100 range, these sharp decreases appear to have carried over into Q1 09. A similar situation is happening for 500 GB and 750 GB HDDs. Last, there is spotty demand for part number-specific 80 GB hard drives and little activity in lower-capacity drives.

2.5" Drives
In the 2.5" market, we continue to track part number-specific demand for the SATA interface in the 80 GB through 250 GB range. In addition to these service requirements, we have seen several large-quantity inquiries for production purposes. These requests have been primarily for the 160 GB and 250 GB capacities.

Currently, there are fewer excess opportunities for the PATA interface in the open market. This has translated to a slight uptick in demand, with pricing remaining stable month over month. The 80 GB 5400 RPM 2.5" IDE is the most sought-after device, with price levels for this drive at approximately $30.

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