Key Metrics and Supply Alert
Staff -- Purchasing, 2/19/2004 2:00:00 AM
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Keep a watchful eye on 32x8 double data rate (DDR) DRAM tags. The spot market price increased from $3.50 to more than $4.00 in January due to constrained supply, according to independent distributor Fusion. Some DRAM manufacturers have cut back production. Look for tags to stabilize in the short term, but fall later in the year.
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Expect good deals on laptop personal computers this summer, when there will be plentiful supply of flat-panel liquid crystal displays. A tight supply situation for large-sized LCD panels has kept prices elevated this quarter. But, market researcher iSuppli sees plentiful LCD supply ahead as more providers are entering the market and increasing their production of both 17- and 19-inch panels.
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The West is helping China become an auto manufacturing powerhouse. Output is rising 25% per year at Chinese auto parts and assembly plants, and not by relying on inexpensive labor. Global automakers have invested more than $4 billion in Chinese factories over the past five years. China's auto plants are using the same capital-intensive technology as Western factories to keep quality consistent so they can meet future domestic demand, and become a big exporter of auto parts and vehicles.
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Almost 90% of U.S. industrial companies outsource at least one activity, says Cutting Edge Information, which believes the global outsourcing market now exceeds $350 billion. Driving the market are costs savings, says the business-intelligence firm. In the past, some outsourcing initiatives were regarded as signs of corporate weakness. Now, such activities suggest a strategic way to improve organizational performance.
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Business travelers are pushing lodging usage rates and prices upward, says Jack Corgel of the Hospitality Research Group, with full-service hotel-room demand jumping 6.3% and average room rates increasing 4.9%. "A late-2003 upswing in occupancies is expected to continue throughout 2004," he says, "driven by a strengthening U.S. economy and continued lessening of the fear of potential hotel users to travel."
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Expect contract prices for ceramic-packaged megahertz crystals to fall 4% in 2004. Tags for 3.5x6mm and 5x7mm crystals fell more than 10% in 2003. Both are mature; alternatives such as the 2x4mm, 3.2x5mm and 2.5x3.2mm packages are replacing them. Average price for a 3.5x6mm device will fall from $0.34 cents to $0.31 and the 5x7mm unit will go from $0.25 to $0.21, according to iSuppli.
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