DisplayBank: prices for 17-inch LCD panels will fall in May
Even with some major TFT LCD panel makers recently raising their quotes for 17- inch LCD panels and demand expected to pick up in the second quarter, South Korea-based DisplayBank still predicts that 17-inch prices will drop (slightly) in May, as supply growth will outpace demand.
Recently, supply for 17-inch LCD monitor panels started running short of demand and Chunghwa Picture Tube (CPT), LG. Philips LCD and AU Optronics (AUO) all stated they will raise their prices for 17-inch LCD monitor panels US$5-10. However, the research firm pointed out that Samsung’s seventh-generation fab will start mass producing panels by April, which should increase supply in the market.
In addition, Taiwan-based makers have been increasing the yields at their 5G plants, and with Samsung also ramping up capacity, supply should overtake demand again in May. Prices should begin declining at that time. However, prices are not expected to drop as dramatically as they did before and will not fall below production costs, DisplayBank pointed out.
GEIL, no problem to survive
DigiTimes.com talked with Jeff Hsieh, CEO of DRAM-module maker GeIL about survival strategies for small DRAM-module makers. Many in the industry expect this year to be tough, but Hsieh remains optimistic about growth and new market opportunities. ‘GeIL is an international company headquartered in Taiwan. Our revenue last year was NT$1 billion. In 2005, we would like to double this amount. Currently, Korea (we’re number two there behind Samsung, but ahead of Hynix), Australia and Western Europe represent the largest markets.
‘We consider our market a niche market. Mostly we target gamers and enthusiasts, which is a different strategy compared to major DRAM-module suppliers. We have some competitors playing in the same niche, mainly we compete with Corsair and OCZ. But I have to say that brand management is very important for this market. Stronger brand means more stable position and more opportunities to gain in our niche.
‘For 2005, we expect DRAM prices to continue declining. Will it bring more trouble to DRAM-module makers? I don’t think so. When DRAM-module prices come down, it attracts end-users, especially the enthusiasts, to buy more memory. Talking about an average enthusiast’s computer, we can assume that last year the memory capacity was probably increased from 256 to 512MB. So at the end of this year it may already be 1GB.
‘With this increase in demand, GeIL doesn’t see any issues with survival in 2005. Our intention is to put more efforts into reinforcing GeIL’s brand name. This means we will be building relationships with our customers.’
Acer looking to add notebook ODM
After ruling out Foxconn as a possible ODM partner for its notebooks, Acer is again seeking a fourth notebook contract notebook maker. Inventec and Asusalpha, a wholly-owned subsidiary of Asustek are the most likely candidates to win the Acer orders.
Acer’s current notebook suppliers are Compal, Quanta and Wistron. Although the current partners can supply the five million notebooks Acer intends to ship this year, Acer will need to add another if it is to reach its goal of seven million notebook shipments next year.
With Acer already cooperating with Foxconn on desktop PC’s, the manufacturing giant was expected to be added as a notebook ODM. However, Acer chairman JT Wang stated that Foxconn has decided not to engage in ODM notebook business, and instead, will focus on OEM notebook production.
Even though Asusalpha’s parent company Asustek is Acer’s main competitor among Taiwan notebook brands, Acer said it will not rule out working with Asusalpha, as long as the subsidiary of Asustek maintains its role as a manufacturer only.
2005 won’t be year of BTX
Although some Taiwan motherboard makers are expected to start delivering BTX (Balanced Technology Extended) motherboards to the channel in Q2, shipments of BTX boards will be limited in 2005. Intel began promoting the BTX form factor PCs in the second half of 2004 and hoped that increased digital home applications would help push sales, and that the segment would account for 15% of global desktop shipments by the end of this year, sources at mobo makers noted. Intel also projected that BTX PC’s will become the mainstream PC platform in 2006, replacing the ATX form factor.
However, BTX motherboards will account for only about 5% of global shipments by the end of this year, well behind Intel’s expectations, the sources estimated. The slow development of digital home applications and the high-priced BTX-compatible components, including thermal modules, cases and digital media adapters, has impeded adoption.
Intel to cut i915 prices, mobo makers facing tight supply and no 6xx migration
Following its price cuts on April 3, Intel will follow with price cuts on four of its 915-series and two of its 945-series chipsets on July 3, On April 3, Intel lowered the prices on its complete lineup of 915 chipsets US$1-2. In addition, unit prices of the 865PE chipset will be cut from US$26 to US$24.
On July 3, prices of the 915P, 915GL, 915PL and 910GL will drop another US$1. In addition, the 945G and 945P next-generation chipsets, are scheduled to drop US$1-2, even though the products should just be entering volume production around that time.
Motherboard makers are being hit by a tight supply of Intel 915- and 865-series chipsets, as well as a PCB shortage resulting from power rationing in China, where many PCB plants are based, according to mobo makers in Taiwan. Power rationing, which tends to be a nuisance seen only in summer months, was recently imposed in southern China, and the power shortage is expected to get worse in the second half of the year. Motherboard makers are now placing orders to PCB plants in southern China well in advance, to avoid a continued shortage when motherboard demand heats up.
The drop in motherboard shipments in the first quarter has been partly due to the tight supply of Intel chips, and they predict the shortage will not ease until the launch of the Intel 945 chipset series in May.
Taiwan chipset makers, however, have not benefited from the short supply of Intel chipsets, with VIA seeing its 2005 revenues drop 11% from last year, while SiS (Silicon Integrated Systems) is also down 13%.
Intel is hoping the market will migrate from 500-series Pentium 4 CPU’s to 64-bit enabled 600-series by Q3 this year, with the chip giant promoting the fact that 915- and 945-series chipsets will support the 64-bit CPU platform. Sources at motherboard makers commented that quotes for the 600-series P4 are still too high for customers, even though they have the support for Enhanced Memory 64-bit Technology (EM64T) and more L2 cache. Although Intel may lower prices for the 600-series in August, sources pointed out that prices for 500-series will drop as well, and the price gap between the two should remain at about US$20.
Motherboard makers in Taiwan also believe that Intel will introduce new EM64T-enabled P4- and Celeron-series for desktops in Q2.
Gigabyte and MSI deliver new P4 motherboards
Gigabyte will start delivering its new Pentium 4 motherboard, the GA-8N-SLI Royal, built using Nvidia nForce 4 SLI chipsets, to the channel in Taiwan by mid-April. The GA-8N-SLI Royal, which is expected to carry a price tag of around US$200, is targeted at performance enthusiasts, and Gigabyte will continue to release other models of its high-end Royal-series.
MSI began delivering its new series of motherboards, the 915PL Neo, which supports both PCIe and AGP graphics cards. The 915PL Neo supports Intel LGA775 Pentium 4 CPUs, 800MHz FSB and dual channel DDR400 memory of up to 2GB. In the Taiwan the 915PL Neo comes bundled with MSI’s NX6200TC-TD64E graphics cards for about US$187.
Other Taiwan makers, including Asus and ECS, are also expected to launch nForce 4-based motherboards early in Q2.
Kingston lowers memory prices
Kingston has cut its module prices to similar levels offered by Taiwan-based module makers, with some prices even undercutting the competition, according to distributors.
Kingston has projected a negative outlook for the market and has lowered its quotes in an attempt to stimulate sales. The company also plans to benchmark its prices on quotes offered by A-Data. A source at Kingston admitted the company recently adjusted its prices but affirmed that Kingston bases its quotes on trends in the market, not upon a competitor’s pricing, while adding that a team in the US specializes in adjusting product pricing.
DRAMeXchange: DDR prices drop below cost
Memory pricing is still trending downward en of march, despite demand from Hong Kong during the Easter holiday. Since mid-March, falling average selling prices has led to some products being sold at below cost. With effective tested (eTT) chip prices expected to drop below US$2, transactions were limited and prices fell almost 9% from US$2.23 on March 22 to US$2.04 on March 29.
Thanks to the four-day Easter holiday in Hong Kong (25-28 March 25-28th), many manufacturers purchased memory from the spot market on March 24, which helped prevent the market from slipping on that day. Given weak demand and negative March sales, many sellers are trying to sell off their inventories at a very low price, but the effects are that since ASPs have dropped below the makers’ costs.