Memory prices appear to be stabilizing, Converge reports
Converge also notes that some Intel products will still be highly constrained throughout the month of May.
Staff -- EDN, May 15, 2008
Memory update
Since Elpida announced at the beginning of April that it would attempt to sustain contract price increases, the memory market has responded. As mentioned in our April edition of Market Insights, in order for the market to rise, all DRAM manufacturers need to be on the same page -- and so far this strategy appears to be working.
For the first time in more than a year, the spot market has experienced steady open market buying from box builders. Most of the sourcing has been for 1 GB 667 ($19.50) and 1 GB 800 ($20.50) desktop and 2 GB 667 ($42 to $43) notebook modules. Converge believes the DRAM manufacturers are purposely shutting off their supply to the box builders to force them into the spot market. It is a strategy to justify raising the contract price. As we head into the end of May, we anticipate that the market will stabilize and maybe even drop a little as the United States heads into the holiday weekend (Memorial Day) and the unofficial start of summer.
Converge believes the market will remain stable at these current price levels, +/- $1 for the next few weeks before starting another round of gradual increases as we head into what is generally the start of the stronger build season.
CPU update
Converge tracks pricing and supply trends for a number of CPU product lines in the global spot market. The following are activities we are currently tracking:
The Intel E8200/E8400/E8500 products will still be highly constrained throughout the month of May, and will remain on hard allocation. However, we anticipate in June that Intel will remove them from allocation and quantities will be available. In the previous months, these products were trading well above Intel-published direct pricing and now are settling down close to direct costs. It appears that Intel is beginning to catch up with its order backlog.
Manufacturers are still taking advantage of cost-saving opportunities with the Intel Conroe series month after month. The Core 2 Duo E6320, E6550, and E6750 are trading below direct pricing and quantities are readily available.
The Intel Core 2 Quad Processor Q9450 (code-named the Yorkfield) is gaining popularity among second-tier manufacturers. It is trading well above the published direct price of $307 and is in very short supply. Meanwhile, its little brother, the Q9300 (with a 6 MB cache instead of the mighty 12 MB that the Q9450 possesses), is more readily available and priced closer to direct.
The Intel Q9300/Q9450/Q9550 product line will still be highly constrained in May and will stay on hard allocation accordingly. We do not expect improvements in availability in June and anticipate this product line will remain in tight supply.
The Intel Q6600 is one part that offers a cost savings. Since the April 20 price drop by Intel, we have tracked this item trading at as low as $199, $10 below direct pricing.
The mobile market has been consistent over the past month, with the focus on the T2130 and T2310 products and the low demand for the lower end T1300+. Demand continues for the T2130 and T2310 products, with supply remaining short.
The T5550 remains stable, selling in the $100 range in large quantities, while the T7100 remains in short supply.
General IC update
The general IC market continues in the steady holding pattern that we have been experiencing for quite some time now. We are currently tracking parts that might experience shortages and delays in the following areas:
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Deliveries are still spotty on some of the TI op amps that have been in shortage for months. Open market concerns still exist on these devices.
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Demand for military diodes and connectivity devices continue to be strong. Shortages in these areas look to continue for some time ahead.
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Spot shortages continue to be a problem on some high CV capacitors, however activity appears to be waning on some Muratas inductors.
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Freescale processors still appear to be tight supply in the microprocessor market.
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We have been tracking spot activity on TI DSPs and Altera PLDs, but no significant problems appear imminent.
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Market activity in general appears to have been heavier earlier in the month of April; this trend appears to be continuing with early May being active, too.
Storage update
3.5-in. Drives
We have seen a significant decrease in demand for the higher capacity IDE and SATA HDDs, which is most evident in the 400 GB and 500 GB capacities. While it does not appear manufacturers have cut direct pricing, open market pricing has declined to the low $50 and $60 range, respectively. Even at these lower price levels, liquidity is still an issue. Generally, pricing has decreased across the board, with movement of product slowing, as well. The 80 GB and 160 GB IDE HDDs have suffered the least, remaining relatively liquid with pricing in the $31 to $32 range and $37 to $38 range, respectively.
2.5-in. drives
The 2.5-in. and the 3.5-in. HDD markets are in a similar state. Demand for the SATA drives has slowed significantly at all capacities (40 GB through 250 GB), with prices decreasing, as well. Specifically, we are seeing open market pricing for 120 GB 5.4K SATA drives in the $45 to $47 range and 160 GB 5.4K SATA drives in the $53 to $55 range (for large-quantity purchases). Pricing for the SATA 250 GB capacity has declined $3 to $5, as well. The IDE interface has not experienced the slowdowns and price decreases to the same extent as the SATA drives. The 40 GB IDE HDD is experiencing the only noteworthy open market price decrease. The 40 GB 5400 RPM drive can be found at $33 to $34 and the 4200 RPM at $30 to $31. There is an increased demand for 7200-speed mobile drives in the 60 GB thru 250 GB capacities.
Converge note: Prices listed for products in the Market Insights are based upon market conditions at the time the articles are written (May 14, 2008). Prices quoted in these articles should be used only as a guide as market conditions vary daily and can effect overall spot market pricing.
