Connected Growth Gaining Steam
Exiting the first quarter, we are seeing that the main demand drivers from the user side of the supply chain continue to be smartphones and tablets. While the question of device saturation in the developed markets has been thrown around, as we saw quite overtly at Mobile World Congress just the other week, leading OEMs in the mobile market are including a dedicated, strategic focus to the emerging market sectors to extend growth opportunities (e.g., Nokia, Huawei, HTC, among others).
However, expanded, low-end mobile device increases is not exactly the type of exciting growth news for the wider semi supply chain. The Bill of Materials (BoM) do not generally tend to offer a wide component sector growth opportunity, simply because these devices are about low cost and high volume to see revenue gain for the OEMs pushing them to market.
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DRAM Prices Up On Thin Supply
During the first week of March, pricing on DDR3 DRAM in the open market increased tremendously: over 15% on PC modules, 3-5% on server modules, and 10-12% on various discrete chips. Pricing in the direct channel increased on the same items as well, though to a lesser degree.
We may wonder why this sudden upsurge in pricing is occurring now, during a normally quiet business cycle, and when all forecasts for home computer sales state that the demand should be flat or running at a negative during the 2013 calendar year. Aren’t the DRAM manufacturers keeping a good pace with all their products in order to alleviate excess inventory on their shelves yet still leave them prepared for any uptick in demand?
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