Trends 2010: Hot PC growth, component shortage, and tight packaging and testing

TAIWAN: According to DRAMeXchange, given the outperformed PC sales during Thanksgiving and Christmas, recovering global economy and new launch of Windows 7, PC shipment indicates satisfactory figures.

We have adjusted 4Q09 NB shipment QoQ from 8.7 percent to 11.9 percent, while in 2009, the overall NB shipment will be up 23.5 percent YoY to 160 million units. DRAMeXchange also upsided 2010 PC forecast to 315 million units with 13.1 percent YoY while NB shipment growth will be remarkably potential to 22.5 percent, which is determined to have strong momentum for entire PC shipments.

With the rebounding demand, continuously growing China PC market, and new DT/NB platform launch in 2010/1 by Intel, 1Q10 NB shipment decline will merely be below 10 percent, which is better than 15-20 percent, the historical pattern. 3Q10 NB shipment QoQ is very likely to reach over 30 percent, accordingly.

DRAMeXchange had seen the tight supply in PC component since end of 2Q09 given the recovering system shipment and conservative supply expansion by component vendors. With the hot season peak and inventory built-up for Windows 7, component supply had faced the severe pressure that ODD, memory, graphic and even passive components all faced degrees of tight supply even shortage that resulted in the lag behind between the real shipment and monthly forecast.

With the foreseeable NB shipment strong growth over 20 percent in 2010 while component capacity is still in tight supply by vendors, DRAMeXchange believes that the component supply will face overall tense while PC-OEMs and ODMs will aggressively secure the enough component volume. For that reason, we also see the upside forecast for PC-OEMs recently.

Meanwhile, high-end IC chips or semiconductors allocation will also like face tight supply given the unsatisfactory 40nm yield rate for semiconductor vendors and foreseeable full capacity in next two quarters. DRAMeXchange expect that PC vendors will likely advance the component preparation schedules to 2Q10 and hot demand is expected to impact on the slow season in 2Q10.

As for the Packing & Testing (P&T) business, DRAMeXchange think the DDR3 P&T capacity will face severe tight supply in 2H10 given the aggressive DDR3 migration to 60 percent, even 70 percent by PC-OEMs, and DDR3 will turn to the mainstream memory spectrum in 1Q10.

According to DRAMeXchange, DDR3 supply will reach 55 percent of total commodity DRAM in 1Q10 and 80 percent in 2H10. Generally speaking, DDR3 testing equipment settlement will take three to four months for pre-installment.

In order to fulfill the DDR3 P&T demand for 2H10, DRAM P&T vendors has accelerated the DDR3 testing equipment purchase and this movement has resulted in the tight capacity for DDR3 testing equipment vendors, Advantest and Verigy.

As for Taiwanese P&T vendors, PTI, FTAC, UTC and Walton show the most aggressive attitude toward DDR3 business. With the assistance from Elpida and Kingston, PTI dominated the DDR3 testing equipment volumes among other competitors that DDR3 testing capacity will be expanded again in 2010 with the potential business cooperation from Elpida, ProMOS and Winbond.

Benefited from the DDR3 migration from Nanya and Inotera, FTAC currently is aggressively negotiating the testing equipment purchase deal with vendors. UTC also decided to purchase DDR3 testing equipment to serve Nanya. Walton, which has built the good relationship with Elpida, will likely to expand the P&T capacity for the sake of 40nm DDR3 cooperation deal from Elpida and Winbond.