Surprising demand for DDR2 modules rattles market, Converge reports
Staff -- EDN, October 20, 2009
Memory update
In a strange twist, the spot market is experiencing a great deal of demand for DDR2 modules when most were anticipating an uptick in demand for DDR3. Spot market pricing has soared over the past four weeks for 1-GB and 2-GB PC800 material. The 1-GB PC800 desktop module has gone from $14 in mid-September to $23 by the close of the first full week of October. Demand remains high and spot market activity has been strong, especially for the 1-GB desktop and notebook modules. Although demand for 2-GB PC800s does not appear to be as strong, the spot market still has managed to spike from $30 three weeks ago to an average of $43 per module by the first week of October. Converge believes the surge for DDR2 will continue for at least the rest of October and maybe even into the first half of November. We could blame “Golden Week” for the surge in price, but the bottom line is that most material comes from everywhere but mainland China. The supply channels in Asia were open but the amount of product simply was not there.
The DDR3 market still is limited in supply, but demand has not been very strong the past few weeks. Pricing has stabilized after several weeks of increases throughout the month of September. If there is any uptick in demand for DDR3, we anticipate it will occur in the next two weeks.
CPU update
In this month’s Market Insights, we examine briefly several of the current trends and continue the commentary on the Intel Calpella as its launch approaches.
A busy market, with many different contributors
The CPU market has picked up speed again, with several sharp shortages and pools of excess inventory, and without any one particular family of processors dominating the market. The market is very fragmented, but the overall picture is of healthy push and pulls on demand.
Old favorites have a last hurrah
End-of-life cost savings or shortages are a common occurrence in the spot market. As a CPU passes out of mainstream production it can accumulate in excess or dive into constraint. It is rare that a family of CPUs that has been end-of-life for a number of years reappears into the supply chain in volume. During September, the Intel Core Duo Napa, and Santa Rosa E4400, E7200, T7800, T9600, T2390, and T8100 models provided some of the best value in the spot market. The actual current end-of-life models, such as the T3200, T6400, and E7400, quietly sold at stable price points, which suggested that they still have pockets of demand in the market.
This is indicative of the delays in the launch of the Calpella family. Some OEMs are pushing on with October launches of the i7-920, i7-950, i7-975, i7-720qm, i7-820qm, and i7-920xm models. An uncertain market keeps the current Intel Montevina family of CPUs in steady demand.
AMD mobiles’ price variances
The run on AMD’s older Turion TL series of CPUs largely has come to an end, but the newer TK and QL models have replaced them with excellent opportunities for cost savings. The key issue is that volume and regional differences in pricing are quite sharp, driving price variations in the market. Some of the desktop Phenom, X4, 9850, and 9750 parts also carry similar spot market savings.
Semiconductors and IC update
The IC market has remained fairly consistent over the past month. Spot shortages and extended lead times are continuing for most of the manufacturers that experienced problems in September.
Converge is currently tracking parts that might experience shortages and delays in the following areas:
There has been some slight movement in lead times on TI DSPs, TPS series of Converters, and SN74 Logic series out to 20 to 21 weeks.
Capacitor shortages are continuing with Murata Ceramic High CV caps and AVX tantalum caps leading the charge.
Broadcom has begun to deliver on some of its BCM5 series Ethernet Controller’s, but others still are causing delivery issues for the company’s customers.
Anticipated shortages on Dialight LEDs have yet to materialize, but we have seen increasing tightness on Pulse "H" series of Magnetic Transformer Modules and Microsemi is still having shortages on both military and non-military diodes.
STMicroelectronics also has started to see some extended lead times, but there are no new concerns for On Semi, Maxim, National, and Fairchild.
Storage update
3.5-inch drives
While higher-capacity 3.5-inch HDD direct pricing continues to slide, Converge is tracking a growing number of part number–specific shortages, with spot market pricing rising accordingly. These opposing trends lead us to believe that there will be stabilization in contract pricing in the near term while manufacturers increase production to meet demand. Most reports suggest that this will be the case for the remainder of 2009. This is specific to the 500-GB through 1-TB SATA HDDs. Meanwhile, we are seeing a slight uptick in open-market pricing in the 80-GB thru 250-GB IDE and SATA interface drives, with the 400GB capacity unchanged month over month.
2.5-inch drives
There is little change to report in the 2.5-inch storage market since last month. We still are experiencing strong production demand, as is typical for the fall manufacturing cycle year over year. Most of the spot market activity is centered on cost-savings opportunities for volume purchases in the 160-GB to 500-GB SATA 5400, RPM HDDs. The more sought-after brands appear to be Western Digital and Fujitsu. Meanwhile, service activity is centered on the Toshiba and Fujitsu brands. This appears to be reflective of changes in market share reported amongst the major HDD manufacturers for this market segment.
Freight and compliance alerts
On September 22, officials from US Customs and Border Protection, the Office of the US Trade Representative, and the Department of Commerce concluded the first-ever meeting with customs authorities from all six major semiconductor-producing economies to discuss the problems posed by trade in counterfeit semiconductor products. The meeting in Jeju, South Korea, preceded the annual Governments/Authorities Meeting on Semiconductors (GAMS), which gathers industry representatives and trade ministry officials from China, Taiwan, the European Union, Japan, Korea, and the United States to address topics of importance for the global semiconductor industry in areas such as trade, the environment, intellectual property and regulatory requirements.
According to a joint statement issued after the meeting, participating officials:
-Reaffirmed their commitment to protect and enforce intellectual property rights
-Shared their experiences and best practices in combating counterfeit semiconductors, from both import and export customs-control perspectives
-Presented options for enforcement actions among GAMS members as well as increased cooperation between members and industry
-Underlined the importance of having access to information on products and processes from the semiconductor industry to facilitate the identification of suspected counterfeit products
-Agreed to undertake enforcement measures, as appropriate, against semiconductor counterfeiting
-Agreed to keep other members informed and to report back on their activities at the 2011 GAMS.
The joint statement notes that the worldwide semiconductor industry represents a market valued at approximately $250 billion in 2008. Counterfeiting of semiconductors poses an increasing threat, not only in economic terms for the companies that products are counterfeited but also to the operation of critical technologies. Semiconductors are increasingly a core technology used in products ranging from mobile phones and car-braking systems to medical devices and satellites.
While these efforts are essential to the livelihood of the semiconductor business they have the potential to add lead time to the delivery of parts crossing international borders. Importers are likely to face increased cargo inspections and requests for documentation.
For the September Market Insights report,
visit this page
.
Converge note: Prices listed for products in Converge’s Market Insights report are based upon market conditions at the time the articles are written (October 14). Prices quoted should be used only as a guide, as market conditions vary daily and can affect overall spot market pricing.
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Does the uptick in DDR2 sales correlate to the enthusiast market rejecting DDR3 performance?
Chad Dailey - 2009-20-10 13:59:00 PDT -
Someone seems to be asleep at their computer. Netbooks in unit sales are surging past laptops and most ship with 1GB DDR2 module that users want to upgrade to a 2GB DDR2. And netbook manufacturers are also buying 1GB DDR2 modules so the uptick should have been easy to forecast.
Bruce Stenman - 2009-20-10 13:30:00 PDT
