Storage
Open market storage activity continues to be very active. As forecasted in our previous market perspective, we are seeing heavy activity for mobile and desktop form factors, resulting in spot shortages and price increases. Much of this can be attributed to the changing users of storage products. Typically manufacturers of computer appliances such as laptops and desktops have driven fourth quarter holiday sales. However, with storage becoming more and more common in many consumer electronic products sold during the holiday season, we are seeing additional pressure on the supply chain - not seen in the past.
Personal Systems Group (PSG)
The PSG market is heating up! Many of the holiday electronics products consume a 3.5” hard drive. Set top boxes to External Storage devices continue to drive the demand for PSG products. We are seeing heavy allocations on 250GB and higher with 500GB capacities in the strongest demand for both PATA and SATA interfaces. We’ve seen some excess opportunities in previous months that have artificially deflated pricing. However, we have seen the excess stock burn off, excluding the 400GB capacity which is still readily available. We expect to see constrained market conditions carry out until the end of the year. After this year ends, we’ll see PATA out pace SATA demand as production support is allocated to SATA which holds 80% of the market.
Mobile
2.5”
Following the PSG market, the notebook sector is also proving to be very healthy. Over the past 2 quarters, we have seen the notebook market make a 180 degree turn. In previous market perspectives, we indicated that 40-80GB capacities could be purchased at well below market price. In today’s market, the pricing for these items has increased almost 25% with demand far out pacing supply. The channel has plenty of inventory on the higher capacity products, 160GB and above. It’s the lower capacities that are proving to be difficult to find. The demand for entry level notebook computers and service on older units is causing some market issues. Current production of notebook drives is mainly SATA as we see 70% of production allocated to SATA and the balance to PATA. This will drive even higher demand for PATA product when the factory stops supporting the channel.
1.8
The 1.8” market has been very quiet with little open market demand or shortages. As the demand for IPOD continues to drive this market, Toshiba and Hitachi have been able to cover Apple’s demands. HP and Dell are starting to use this form factor in a limited number of portables. Maybe with the demand for lighter and thinner laptops the 1.8” market will be more than an IPOD drive?
Enterprise
SCSI product continues to be regularly available at aggressive pricing. No shortages and plenty of products in the channel makes it a buyers market. SAS product in 146GB and 300GB are showing spotty demands, but still plenty of this product is available in the channel. We are only seeing demand for 73GB capacities and smaller on SCSI and fiber channel products and mostly for product that is end of life.
