Gray-market chipset prices appear weak over unclear market demand

With no clear signs suggesting a demand recovery, the chipset gray market has remained flat in the past two weeks amid news of improving orders at motherboard companies.

The weak demand appears to be reflected by chipset prices in the gray market. According to sources, 845E discrete and 845G integrated chipsets are being sold at no more than US$1 less than their official quotes, while the gray-market price of the cheaper 845GL integrated chipset has dropped to US$24.80, nearly US$2 lower than its original quote. Some vendors even propose a cheaper price for large-quantity purchases, which seems to suggest the 845GL is less favored by the market.

Board makers said that although the number of Intel Socket 478-based Celeron processors, which is paired with the 845GL, has been increasing this month, OEM companies and distributors still find the chipset less appealing, as the 845GL is more expensive than other Taiwanese chipset designers’ products and does not allow users to add an extra graphics card.

Comparatively, the 845G chipset is a better choice for companies to avoid the future risk of inventories. The popularity of 845G boards is also due to its relatively cheap price. According to motherboard manufacturers, the 845G board is currently quoted at US$2 more than the 845E product.

As the market mainstream continues shifting to the DDR platform, the shipment ratio of DDR-based products in individual manufacturers has been rising as well. In July, the figure has reached 80%, and it is expected to exceed 90% in the fourth quarter.

Source: companies, compiled by DigiTimes, July 2002.

Article translated by Christy Lee and edited by Richard So