April 14, 2010

Arrandale shortage may have a prolonged effect

Converge CPU Update.

As reported in last month’s Market Insights update, the long-awaited Intel Arrandale mobile CPU shortage arrived and it gathered momentum in March.

In particular, the off-road i5-430M, i3-330M and i3-350M were affected. These processors are currently not available to all OEMs, with Intel supplying first to Tier 1 OEMs along with some smaller “early adopter” gaming machine producers. This meant that the shortage was not market wide, with only the very large or niche players affected.

Throughout March we were tracking sporadic large demand on these parts while supply was severely restricted. It is unusual to find a device shortage that cannot be solved in the open market, but in March the off-road-map Arrandale was in short supply and demanding a 20 percent premium above its contract price. This shortage looks to continue through April. However, many manufacturers remain unaffected as they continue to utilize the Intel Montevina processor family, where supply remains healthy.

While the mobile market buzzed with activity, the desktop market was quiet by contrast. The retail box market offered cost savings on a range of “I” series in Europe, and this lessened the demand for its tray equivalents. The E8400 enjoyed an extended lease on life as the processor remained a high runner, but demand is expected to tail off in favor of newer models.

The repair and embedded markets continue to show steady growth and we see signs of a more healthy market in April and May. We also believe the Arrandale shortage must ease soon or it will have a prolonged effect as the entire manufacturer base may “swap-out” to the newer models.

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