CPU update: Demand for mid- and low-range mobile CPUs continues

USA: Presenting Converge's Market Intelligence Report, August 2009.

As the summer heats up, the spot market remains cool with no sign of the big shortages that headlined the news in previous years. At this time, we don’t anticipate any late surge. Instead, a spread of demand pockets contributed to respectable CPU demand in July. Currently, we are tracking the following trends:

OEM TJ models see a sluggish changeover
Demand for mid- and low-range mobile CPUs is continuing for end-of-life technology, while newer models lurk in the shadows. We’ve been anticipating the Intel T4300, T6600 and T3000 chip series to reach mainstream demand in early summer; however, many OEM builders prefer the end-of-life models, as the supply of new parts and customer interest is slow to develop.

At this point in the season, following the Computex event, we would expect to see a big rise in interest surrounding newer models. Relatively flat demand, a large price gap to the new models and a limited supply has conspired to a market reluctant to make a significant move. The T4200 for example is selling at $70+, while the new model T4300 is in short supply, more expensive at $80+ and only boasting a 0.1 GHz faster speed, which is not exciting consumers.

Elsewhere, Atom CPUs are slowly creeping into the spot market in bundle deals complete with chipsets and motherboards.

Xeon savings a worthy quest
Large cost-saving requirements for Intel Xeon 5140, 5160 and E5420 swept the market in July as customers were actively searching for savings. While a cost reduction of 6 percent on desktop parts is a good find, for Xeon processors it is not unusual to find 20 percent+ price differentials from region to region.

The supply is uncertain, and volumes are less than mobile or desktop requirements. However, the size of the savings opportunity makes it the best value in this market.

Old favorites headline desktop market
The Intel E8400, the popular desktop CPU, has been highlighted in previous editions of Market Insights over the past year. It is not yet scheduled for a price drop, meaning demand remains steady. However, the market price has varied wildly during the summer, swinging from a classic 8 percent cost-saving part to shortage and back again.

The Intel Q6600 and E4600 processors lead the list of parts in demand and as a result are commanding a premium price. Demand in the spot market for high-end Core I7 desktop processors remains low, resulting in minimal cost-saving opportunities. Converge will be monitoring demand patterns for high-end CPUs and the low-end Atom mobiles in the coming months.