Market intelligence for the electronics supply chain
Staff Reporters -- EDN, September 17, 2007
The Converge Market Intelligence team, made up of commodity managers and data analysts located around the globe, monitors and analyzes the daily pricing and supply and demand of high-tech commodities.
It provided the following market insights.
Memory Update
Against industry expectations, the market for DRAM memory is approaching the same lows experienced back in the spring, when most thought market prices had hit bottom. Generally, August is a strong month for memory demand due to production ramp-up for back-to-school and pre-holiday builds, but the market has taken a step back and spot pricing has declined. Current spot market pricing for DRAM has dropped to $17 and $31 to $32 for 512MB/667 and 1GB/667, respectively. Contract prices are expected to remain low for the first half of September, and judging by the amount of product available, Converge believes there will be an additional drop in the latter half of September.
Currently, there exists much uncertainty and confusion as to where the DRAM market is headed. Many in the industry were forecasting an uptick for DRAM memory for the second half of 2007, but it has not come to fruition. OEMs claim they have plenty of stock on hand; however, we believe they have more than needed. The spot market is running well below contract and there are no signs of any opportunity buys taking place. We still believe the market will not show any significant signs of an uptick for the remainder of the year, unless a drastic event occurs over the next two to three months.
CPU Update
Open-market production desktop CPU trading has begun to slow slightly, as heavy demand and short supply of several 900 series and older 800 series CPUs began to taper off. However, mobile processor activity has accelerated.
Currently, general CPU trading tends to be divided into three distinct areas: production desktop, production notebook, and service/repair. Due to the nature of the open market, the balancing act between these three areas is mostly dictated by supply and demand rather than industry management. Oddly enough, as any one category tends to dip, another takes off. Of late, at least 60 percent of the CPUs we are shipping are to notebook OEMs. Seventy-five percent of our shortage requirements are for notebook builds, and mobile processor buyers are very interested in all cost saving opportunities. As the Santa Rosa platform is marketed heavily by Intel, for example, volumes of the Napa processors, in some cases, are being traded openly at significant savings.
Overall, the increased number of older technology CPUs shipped to repair sites this summer has positioned Converge as a one-stop-shopping house for those needing older or trailing edge AMD and Intel CPUs. For example, classic Pentium processors with 100 MHz core speed were recently sold. If you are in need of obsolete hard-to-find processors or need to sell no-longer-needed processors that may be in your inventory, contact a Converge sales representative.
General IC Update
The following parts may be experiencing shortages and delays in the following areas:
Cortina LXT971A and LXT972A fast Ethernet transceiver is experiencing tight delivery due to lead-time stretched from six to eight weeks to eight to 12 weeks.
Xilinx XC3S2000 and XC3S4000 Spartan-3 FGPAs product family lead-times have stretched from six to eight weeks to 10 to 12 weeks due to design changes. However, there is no change in lead-time for other Xilinx products.
Demand is spiking on some EOL Intel microprocessors, such as TN80C196xxx, N80C196xxx, EE80C196xxx, TA80C186xxx, EE80C31xxx, S87C51xxx, N87C51xxx, and EE87C51xxx. These devices are hard to find with no replacement parts for this range of products.
Converge is observing spot shortages in the MPC family of Freescale processors, especially in the MPC 8260, 8270, 7410, 860, and 755s. Some of these parts are facing long lead-times, and some allocations are expected.
Supplies of TI/Burr Brown INA, OPA, and DAC family of Op-Amps remain very tight.
Capacitor demand remains stable.
Military versions of Microsemi diodes are currently experiencing some of the longest lead-times in the industry.
Storage Update
Desktop Drives
We are noticing increased demand in the 80GB desktop HDD resulting from an apparent shortage. The result is an upward trend in pricing across all capacities. This is inclusive of both IDE and SATA drives; however, the shift continues towards the SATA interface. The need for 40GB IDE HDDs remains in the service market, while lower capacity drives continue their slow decline in price.
Notebook Drives
There is little change in the notebook HDD market since our last update. We continue to see increased demand for higher-capacity notebook drives, most notably in the 80GB, 100GB, 120GB, and 160GB HDDs. SATA is favorable over the PATA interface. Lower-capacity drives remain fluid in both 4200 RPM and 5400 RPM speeds. The greatest price decline occurred in the 40GB capacity, while other lower capacities remained neutral.
Server Drives
The shift away from SCSI HDDs to higher-capacity, lower-cost SATA drives continue in the server space. The major activity is in the 400GB and 500GB capacities. We are observing little demand for the 750GB SATA HDD at this time. Service demand for SCSI HDDs remains in the 36GB thru 146GB capacities. Fiber channel HDDs are the least liquid, with demand only coming from small service requirements.
