Some of the unique benefits to buying and selling electronic components every day are the accumulation of valuable commodity insight, expertise and a privileged perspective on the market. To benefit MarketWatch Quarterly readers, we've polled the Commodity Managers at Smith & Associates and compiled their views of where the market is headed. These views are based on current component trading, incoming requirements, inventory levels, open market product offerings and supplier data. The responses are grouped by commodity family. The following is Smith & Associates' outlook for the first half of 2008:
- Just as in 2007, new communication and consumer electronics products will drive an increase in NAND usage in 2008. While Apple continues to remain strong in flash usage, it has more recently made significant cuts in its forecasted orders. This news, coupled with softening demand from other manufacturers, will cause supply to remain abundant and will likely continue to outstrip demand.
- As Microsoft Vista becomes more mainstream, DDR2 capacity per unit is likely to increase. Current supply is adequate to accommodate the additional demand.
- The broader use of Microsoft Vista may also lead to the earlier adoption of DDR2/800 in lieu of the current 667 family. Intel chipset compatibility issues with the 800 speed DDR2 have been resolved and capacity is increasing, bringing the pricing of 800 speed closer to parity with 667.
- While 2007 saw the transition from single core to dual core processors for both Intel and AMD, 2008 will mark the transition from dual core to quad core.
- AMD and Intel both continue to grow their product mix, offering specialized processors for niche markets such as gaming, graphics, low-voltage offerings, and more. While this is a great development for the consumer, PC OEMs may have trouble forecasting which products will gain them the largest market share. This trouble will likely also result in a struggle to forecast their CPU requirements.
- PC mobility will be the primary driver for the PC market in 2008. Both Intel and AMD are pushing mobile processors, and PC manufacturers are actively marketing mobile solutions to their consumers.
- These factors, coupled with the transition from 65nm to 45nm technology, which was highlighted in MarketWatch Quarterly Fall 2007, could lead to spot shortages and inventory excess in the CPU market. Pricing is certain to be affected.
- Rapid advancement in communications technology, the increased application of electronics in automotive design, and economic and regulatory pressures for energy efficiency are contributing to the rapid growth of applications using analog devices, particularly analog-to-digital converters (ADC), sensors, and power management devices. This multi-sector growth will result in increased open market activity for these components.
- Long lead times for Texas Instruments parts will continue to fuel demand in the open market.
- Leaded product from Analog Device will be in demand due to increased pricing from the manufacturer.
- Notebook PATA drives will go End of Life (EOL) first quarter and are becoming scarce. 60 GB PATA 4200 rpm and 80 GB PATA 4200 rpm are particularly short.
- SATA notebook drives will remain freely available in the market. Pricing for 80 GB and 120 GB drives have dropped over the past 2 months. Pricing for large capacities of 200 GB and 250 GB drives have held steady. Capacities of 250 GB -500 GB are active in the market with movement away from the lower capacities and toward the higher capacities.
- Activity on 17 inch LCD screens has increased during the current quarter.
- The supply of Intel processor gaming PC motherboards is increasing in the open market while some Gigabyte boards are becoming notably short.
- Lead times for On Semi, Vishay and ST Micro are beginning to stretch with allocation of ST Micro thyristors continuing.
- MOSFET consumption will continue to increase due to growth in end-user applications in all sectors.
- Energy efficiency regulations are driving a strong market for LEDs, infrared components and optocouplers.
- Infrared components, in particular, are in strong demand due to continued advances in their use in medical and security applications. Longer lead times will increase market activity for Toshiba and Sharp products.
If you would like to know more about Smith & Associates' market analyses and forecasts, or have specific requirements that need to be addressed, please contact:
Memory: Todd Banker, +1.713.430.2152
CPUs: Todd Traylor, +1.713.430.3969
Peripherals: Debbie Box, +1.713.430.2176
Discretes and Optoelectronics: Layla Wright, +1.713.430.2168