Converge Storage Update.
Demand continues to rise for storage devices in the 3.5" market. This trend began the first month of the first quarter and has continued to the present. Currently, we are experiencing an uptick in pricing on 160 GB through 400 GB capacities month over month. This translates to approximately $2 per hard drive in that range. SATA HDDs are less expensive by $2 to $3, compared to IDE HDDs of the same capacity. There has been little to no change in pricing for 80 GB, 500 GB and 750 GB capacities when compared to April prices.
The 2.5" storage market is in a state similar to that of the 3.5" market. Amid reports of decreased inventory levels, coupled with production issues, we are tracking a spike in demand. This is particularly true of, but not exclusive to, the SATA interface in the 160 GB through 320 GB capacities. Pricing has remained stable, with increases expected in the near future as specific capacities and speeds become scarce. The market remains active in the lower-capacity IDE drives as well. This is evident in the 20 GB through 80 GB capacities in both the 4200 and 5400 speeds. All capacities in this range are liquid, and open-market pricing has remained remarkably stable.
May 13, 2009
Converge Storage Update.
Posted by Converge at 4:53 PM
Converge Integrated Circuits (IC) and Semiconductors Update.
There has not been any significant change to the integrated circuit (IC) market since our last Market Insights report. Once again, we are tracking some sporadic shortages in some product lines, but nothing that is sustained over a long period. Most of these shortages are due to small upticks in demand. With many semiconductor manufacturers cutting back on production, and less product on the shelf at franchise distributors, it is more difficult for OEMs and CEMs to quickly pick up supply to solve these spot shortages.
However, there are still plenty of cost-savings opportunities in the spot market, given some of the excess material that exists in the market. With some customers slowing down or cutting production, there are some great potential cost savings available to customers. In addition, companies with date code flexibility can certainly take full advantage of this market and the opportunities it presents.
Converge does not expect any significant changes in market conditions over the next couple of months, although some predict the market will experience an overall uptick at the end of this year. That would certainly have a significant effect, given all the shutdowns and cutbacks by semiconductor manufacturers over the last year. Some of that optimism could be tied to what some see as the beginning of the turnaround of the global economy. For now, the market waits.
Posted by Converge at 4:48 PM
Converge CPU Update.
The CPU market in April, if viewed against previous years, could be described as being steady with a seasonal calm in demand. However, Converge remains optimistic based on signs of a potential recovery and upswing in May and is encouraged by new opportunities that exist in the marketplace.
Mobile shortages drive demand.
Over the past several months, Converge has been tracking a clustering of demand around lower-priced processors. A shortage of mobile processors in the lower segment of budget CPUs resulted in increased demand for these processors on the spot market in recent weeks. T2390 and T3200 all the way up to T6600 models remain in short supply and high demand.
Rumors return of a tightening of desktop processors.
Several slightly older desktop microprocessors are rumored to become in short supply in May. This list includes E2200, E2220, E5200, E7400 and E8400 processors. The E7400 and E8400, at the time of writing of this update, remain the best-selling parts at a cost savings; however, we anticipate a tightening of supply heading into the summer months, driven by the traditional phasing out of older technology. In addition, due to a history over the past four summers of a burst of excess and obsolete shortage desktop activity, it is advisable to monitor this space carefully. Converge will monitor and report in future Market Insights updates.
Atoms are puzzling.
The spot market has not fully cracked the potential of the Intel Atom market. To date, demand is present; however, a surplus of large-quantity inexpensive excess has yet to emerge. We anticipate more customers will turn to the Netbook models, as it is sure to become an increasingly important open-market segment. For the short term, demand is maintaining pricing levels in the spot market.
AMD rides again.
AMD parts remain in demand in the spot market, especially for the mobile processor. In the past the Athlons, Semprons and Opterons provided good savings opportunities as AMD provided wildly differing prices, not only by region or country, but also by customer. The market has long since settled, but we do see opportunities existing in the new mobile range of Q, R and Z parts.
Posted by Converge at 4:42 PM
Converge Memory Update.
Over the last several weeks, there has been a lot of uncertainty in the memory market as DRAM manufacturers attempt to cut supply from reaching the spot market. These tactics are intended to raise prices to justify a substantial increase in contract prices for the first half of May, which will settle 10%–12% higher. Spot market pricing has also gone up over a two-week span. Prices for 1 GB PC800 modules have risen from $9.50 to $11.00 and for 2 GB PC800 modules from $19 to a high of $22 as of May 8.
Although there are some signs of product tightening, Converge believes that the next four to six weeks will be extremely volatile in the DRAM market. The games will continue between the DRAM manufacturers and end users as they try to gauge what the true supply situation will be heading into the next two months. Converge believes that the next three weeks in particular could produce significant swings in the spot market for both price and supply. There is a holiday in the United States, Hong Kong and Taiwan during the last week of May, which could affect supply and demand. Vendors may look to position themselves a little earlier than normal for the month end, which could have a negative impact on price. If that is the case, we should see more supply in the market for month’s end.
Posted by Converge at 4:39 PM