Smith is always engaged in the market, no matter what kind of cycle it’s in, but the current market, specifically, offers many ways to support manufacturers across different commodities. Through Smith’s long-time market presence, Smith traders are keenly poised to leverage worldwide purchasing power as well as engineering ingenuity (in the form of Smith’s certified Counterfeit Detection Lab) to provide Smith’s customers uninterrupted supply chains and flexibility in an inflexible market. Below are some of the highlights and trends noted by Smith’s analysts.
- In the mobile memory market, availability has increased for excess inventory on MCPs – like eMMC and LPDDR (1,2) – from mobile/smart phone makers, tablet builders, and other mobile app OEMs. We should continue to see this trend increase even further throughout the year.
- There has been a considerable increase in SSD requirements, with the potential for shortages in Q3.
- With the DRAM market’s consolidation to only three major suppliers – and with these suppliers’ capital expenditures dropping – DRAM ASPs (average sales prices) have risen 13% year over year in January, contributing to a 21% growth in January DRAM sales during 2013. [CH1] From January 1st to March 28th, there has been an increase of approximately 75% in DDR pricing! http://www.electronicsweekly.com/blogs/david-manners-semiconductor-blog/2013/03/fewer-players-less-capex-boost.html
- Nanya is moving away from the predominant PC OEM customer base that has been the focus of their business for the past 10 years. Their focus will now be on engaging with non-PC customers (basically, anything that is not a desktop, notebook, or server). Nanya’s main targets will be: Set Top Box, Networking (hub, routers, switches), Industrial, Automotive, Printers, Storage (HDD, SSD), and Mobile (anything that requires low-power DRAM).
- Our experience validates recent reporting by Solid State Technology that global semiconductor inventories fell quickly in Q4 of 2012. http://www.electroiq.com/articles/sst/2013/03/intel-leads-unexpectedly-large-decline-in-semiconductor-market-i.html?cmpid=EnlAPApril82013 SST cites specifics from IHS iSupply that include:
- Days of inventory for semiconductor suppliers fell 5%, compared to Q3 of 2012, which was down 8% from the previous
- Chip makers are continuing to decrease capacity, while at the same time raising ASPs. Specific inventory decreases include:
Intel down 11%
AMD down 25%
ST Micro down 9%
- Franchise distributors in Europe and Asia are continuing to DISCOUNT their inventory to move it off the shelf and post better earnings. Worldwide sales of semiconductor manufacturing equipment were down 15% year over year! http://www.semi.org/en/node/45081 Less new equipment means flatter chip production.
- LCD pricing is staying consistent.
- Samsung MCU products are increasingly sought after on the open market, while CPUs, especially Xeons, are plentiful.
The market has cycled up in several areas, some of which are in Smith’s historical niches and some of which are in new product categories. Either way, Smith traders are proactively utilizing the information and managing the relationships in the market that will enable them to gain the greatest benefit for Smith customers.