November 11, 2009

The Intel Atom market explodes, driving spot market volume

Converge CPU Update.

As discussed in previous editions of Market Insights, the CPU demand mix for production builds has shifted away from desktops to notebooks and lesser-priced netbooks, which have become the secondary computer of choice. This, combined with the overall mix of reliable and inexpensive technology that has reduced the average cost per chip, means that opportunities for cost savings are abundant for CPU buyers.

In the desktop market, we have identified some encouraging trends for price savings in each of the principal price bands. Currently, the Celeron D 430, E2220, E5300, E7400, E8400 and Q9400 are all available at a cost savings. This represents parts that trade in the $30, $50, $60, $100, $160 and $180 price brackets, respectively, with potential cost savings up to 12%. This is usually caused by oversupply of a particular or similar model.

The picture is somewhat different in the mobile market, where T3000, T4xxx, T6xxx and P7xxx models are in healthy demand when prices fall below their unofficial direct cost, but more often than not we are seeing uneven shortage demands and a sell price of 1% to 2% on either side of direct pricing.

The netbook market and the Intel Atom family are driving unit volume growth in the CPU spot market. After an initial sluggish beginning for the Atom in the spot market, sales have now soared, with primary demand driven by the motherboard and chipset bundle. Demand for the low value/low power Atom chip is the greatest in Asia, while U.K. and U.S. manufacturers tend to prefer their Atom-equipped computers be prebuilt before shipping into their particular markets.

Converge is also continuing to observe steady demand in the server, embedded, industrial and repair markets.

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