April 15, 2009

Mobile shortages drive CPU spot market

Converge CPU Update.

In this update, we look at the curious case of AMD as an open-market channel, the continued hegemony of mobile CPUs and some unexpected desktop shortages.

AMD – an unpredictable open-market beast.
AMD (Advanced Micro Devices) has never acted like its chief rival, Intel, which announces and schedules price drops during the year. Instead, with AMD, different pricing per SKU can be offered to customers within the same region. This makes AMD a different animal on the open market, accounting for a smaller percentage of the overall CPU market share. Additionally, unconfirmed rumors of a pending price drop in April/May, and which parts will be affected, have caused concern among vendors and customers alike.

On the positive side, we are tracking an increase in demand for AMD mobile chips. End-of-life models such as TL50-64+ are good cost savers in emerging markets or service environments; current models in the QL/RM/ZM series are also providing good spot savings opportunities.

Mobile shortages give market a lift.
The month of March brought a number of shortages in mobile CPUs. Intel parts at the lower end of the scale such as Celeron mobiles; T3, T4 and T5 OEM models; and the BGA SP9300/400 were also affected. The higher-end P8400 is proving hard to find as it moves into end of life, while the P8700 processor slides into supply. Demand for the Intel Atom has been on the rise and excess has been nonexistent. Customers are looking for the Atom family with or without the chipsets that are normally bundled with them. Those who currently have inventory decline to sell, fearing that Intel will not be able to keep up with demand for the popular netbooks.

Customers continue to cluster around the lower–to-midrange models. As mentioned in previous Market Insights reports, there is cheap excess of higher-end parts, and, in March, the T9500, T9600 and some of the X9… parts were available at a cost savings.

End-of-life Napa parts (T2250-T7200) are an excellent value now, and even some of the older Santa Rosa models such as the T8100 have enjoyed a revival through last-time excess saving buys.

A quiet desktop market.
Older desktop Celerons enjoyed a last hurrah in March, with dozens of customers looking for last-time buys. The parts are short and becoming less popular in common production, with the E1 series taking over. Nevertheless, CD 430/440/450 were very active and were trading about $5 above their normal price. The E8400 and E7400 continued to offer moderate savings, but as these are both high runners on most OEM’s AVL, demand remains high and stable.

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