Chinese New Year quiets IC market
Converge reports The electronics supply chain player reports that DRAM saw about a 10% pricing drop as the holiday approached.
Staff Reports -- Electronic Business, 2/18/2008
Editor's note: The content in "Market intelligence for the supply chain" is provided by Converge, a global supply chain partner for technology driven companies. 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
Don’t be fooled by the sudden rise in spot market pricing for DRAM memory over the last four weeks. Although the market has spiked roughly 20% to 25% on the staple 64x8 PC667 chips, there have been no signs of any module activity in the spot market. The 64x8 PC667 chips rose from $0.85 to $1.10 over the past month, but they have since settled at roughly a $1 price point. With the rise in 64x8 PC667 pricing, module pricing also rose--not due to demand, but due to the cost of goods to assemble. In fact, there is still plenty of 1 GIG PC667 module inventory available in the channels. The 1 GIG modules rose from $17 to $20 to $21 during the time span already mentioned but also retreated to an $18.50 price point. Various industry analysts believe the rise in price was due to a slight reduction in production from the DRAM manufacturers and spot market buys needed for builds before the Chinese New Year. As the holiday approached, pricing quickly dropped by about 10%.
None of this activity should be considered a rebound, as the market has not been able to sustain the increase in price. Converge still believes we are several months away from a true, sustainable rebound in the DRAM market. It is still too early to forecast an exact timetable as to when the market will gain some meaningful momentum, but we are hoping that by the end of March we will see some signs of life.
CPU update
After a solid four-month stretch of spot market trading primarily for server and notebook processors, the January 20 Intel road map stop triggered a surge in desktop processor activity. The date officially marked the first time a dual-core processor was marketed to the value segment at under $30. On the performance side of the spectrum, a dual-core Pentium with 1 MB of on-die memory and an 800 megahertz front side bus speed became available at $60, down from the previously published standard of $70.
The resulting price drops for the Pentium dual-core CPUs increased demand for the Pentium D 925 worldwide, with spot market activity increasing to levels not experienced since the initial release. Currently, most desktop processor activity surrounds the new $159 to $258 Core 2 Duo processors E8200, E8400 and the 3.16 GIG E8500.
Demand for the E6XX series processors has mostly disappeared since the end of 2007, yet there was no evidence of new product being available to transition to in the market. Requirements for the E8XXs began well before their release date, and the parts have continued to be in high demand and short supply ever since. Current demand has dictated a market willingness to pay a slight premium for any of the three parts offered. We expect this demand to continue for at least the next three months, as direct support seems unlikely.
General IC update
The anticipated slowdown leading up to Chinese New Year arrived a little sooner than expected this year. There will be little movement in the industry until Asia returns to full force by the middle of February. We are currently tracking parts that might experience shortages and delays in the following areas:
-TI op amps, Freescale processors, and Microsemi military diodes continue to experience long lead times.
-Some high-CV capacitors are still seeing spot shortages, as are some of the "run of the mill" ceramic caps.
-Lead times on Kemet tantalum capacitors are extending, and there is an increase in demand for AVX tantalum caps.
-Pressure on Cypress microcontrollers and clock drivers seems to have abated somewhat.
-We are tracking some spot shortages on Fairchild and Maxim devices.
-We see continued shortages of Broadcom parts, especially the Serverworks chips.
-There are continuing inquiries for Qualcomm mobile phone chip sets from Asian mobile phone makers, confirming a slight upturn in mobile phone demand.
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edn.com
FYI
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