SAN FRANCISCO -- Weak component pricing bodes well for OEMs this quarter, a leading tech analyst said today.

DRAM and NAND prices are down 20% and 35%, respectively, so far this quarter, versus their fourth quarter average selling prices. LCD prices have fallen 5%. Pricing for hard disk drives for desktops has been flat but has dropped sharply for notebooks.


The DRAM price drop continues a decline started at the end of last year.

 Intel, which owns roughly three-quarters of the PC microprocessor market, is working out its overinventory, and  as a result CPU pricing is leveling. ASPs are down 2% versus last quarter's average.

OEMs stand to benefit from the pricing softness. "A weak component pricing environment should benefit all PC OEMs in the March and April quarters, " said Chris Whitmore of Deutsche Bank's Equity Research group.

"We believe PC OEMs and the channel overbought DRAM on concerns of shrinking supply and higher demand due to (Microsoft's) Vista. Due to previous stock ahead of the Vista ramp, we believe PC OEMs now have more than enough DRAM component supply, which is pressuring ASPs. "

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