Converge Storage Update
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.
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.
March 18, 2009
Converge Storage Update
Posted by Converge at 1:14 PM
Converge General IC Update
Demand in February was softer than anticipated for general integrated circuits, as customers are working toward keeping inventories low while waiting until the last possible window to place orders. March has begun stronger; however, we are also tracking an increase in excess inventory lists being made available to the spot market.
Although activity decreased somewhat in February, we are tracking an uptick in demand for some Tyco connectors as well as increasing lead times on some Altera PLDs. Demand has remained steady for Freescale processors and some TI DSPs, while softening for PMC and Broadcom networking chips.
Opportunities remain strong for buyers looking to take advantage of available excess. However, we are starting to see isolated spot shortages, primarily as a result of franchised distributors working hard to reduce their inventory levels.
Posted by Converge at 1:09 PM
Converge CPU Update
Intel’s dramatic drop in profits for Q4 2008, combined with the closing of several factories, cast a cloud of doubt over the CPU market at the beginning of the year. However, the market remains calm, as an anticipated glut of excess inventory resulting from the recession has not emerged. Microprocessor prices remain firm while February and March have seen a gradual easing of traditional production demand.
Overall, pricing of the popular TJ OEM model CPUs (T2390, T3200, T5800, T6400, etc.) has not receded, while midrange desktop CPU models E2220 and E5200 are trading at, or slightly below, direct pricing.
While demand remains moderate, our tracking indicates that customer requirements are moving from low-end Celerons and high-end Montevinas toward midrange CPUs. Converge believes that this trend is why pricing remains steady – with demand congregated around 10 SKUs on mobile and desktop units.
Elsewhere the situation remains more volatile.
High end sees hard times
The X8100 processor is a high-end CPU that would make even the biggest “techie” jealous. It is a Core2 Extreme edition mobile processor and, at $800+ direct, priced above most complete laptops. Similarly, the Santa Rosa T9500 is a high-end processor currently priced at $525 direct. Both are currently available in the spot market as OEM excess at roughly half price. Now is the time to procure these processors for big savings.
For desktops, the older QXXXX models are once again trading below direct pricing by as much as 20%.
Embedded products revive demand
The proliferation of embedded products has revived the demand for older processors. For example, the Celeron M 300 series of microprocessors, which had their production heyday in 2004, sold for $30-$50 per unit. Today, as an embedded product, direct prices for the same product are usually above $60.
OEMs with excess inventory of older low-voltage Celerons, NAPA T7200 or T7400, for example, can find sales opportunities in the spot market. Contact Converge to learn more.
Posted by Converge at 1:05 PM
Converge Memory Update
Is the memory market back at the bottom again? After a brief uptick in DDR2 pricing, the market has quickly fallen back to trading in a price range not seen since the pre-Christmas holiday season. Contract pricing remains flat while DDR3 contract pricing is on par with DDR2. Spot market pricing for 1 GB modules is in the $8-$9 range while pricing for 2 GB modules is in the $16-$17 range. Whereas activity in the spot market for DDR2 has become nonexistent, pricing for DDR3 is still much higher than contract prices. Converge believes that this is a result of vendors being stuck with higher-priced inventory that experienced the sudden and steep contract price reductions that transpired over the last few cycles. Currently, the outlook for DDR2 and DDR3 remains flat, while the market will most likely remain at current price levels for the next several months.
The SDRAM market continues to show strong activity. Pricing continues to move upward, although not at the pace experienced during the first two months of the year. Currently, we do not forecast any slowdown in this activity. Demand remains high, and the transaction volumes remain steady, with Samsung, Qimonda and Elpida the three main manufacturers experiencing the most product requests.
Posted by Converge at 1:02 PM