July 15, 2009

Barely a shortage whisper

Converge CPU Update.

Shortages take a vacation
In the past, the summer months have brought not only warm weather, but shortages in the CPU market. And July has always been a busy month in the spot market. Last year, the big Intel end-of-life desktop shortage rolled in around June and kept the market busy until the pre-Christmas season. From the Pentium 4 630s to the 925, and the E6550 to the E8400, desktop parts arriving or leaving the market drive market volume demand.

This year the there are no hiccups to report in the Intel supply chain. The E8400 is still being supported though Q4, and there’s barely a shortage whisper on other desktop parts. It appears that Intel has confronted the trend for the time being. Currently, we’re watching the E7400-500 and E5200-300 model switch for possible signs of a shortage.

Xeons drive reductions
Xeons and AMD Opterons are the current drivers this summer for cost-saving opportunities. This is the direct result of relatively higher pricing, a long shelf life allowing excess pockets to build and many price discrepancies across regions. The spot market is abundant, with many cost-saving opportunities in server chips, which is an unexpected situation given stalling consumer demand.

Laptops continue to lead the way
OEM TJ models and low-end parts are dominating current demand. Broadly, we group the current mobile business into two categories: low-end shortages and high-end savings. Users of the T7, T9 and P9 series should be able to obtain large-margin open-market savings. The T9400, T9600, P9500 and T9500 in particular offer extraordinary value. The T9500 sits direct above $500, while it can trade far below $300 in the spot market. The T4200/T4400 and all the T5 (Santa Rosa and Montevina) and T6 series have been short for the past several months. Celeron Mobile 4 and 5 series are still hard to find. Savings on the end-of-life T6 series can be found, although some OEMs are sticking with the older parts as long as possible. If they are committed to the T6400 and it goes short, they may move up to the T6500 or T6600. Otherwise, it is a lot harder to transition back down the speed range.

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