Sometimes a shortage of devices in the marketplace can be a good thing! Well, it can at least if you are part of the game, anyway. Check it out:
Every computer, server, PlayStation and iPod has a hard drive.
Cell phones are next.
Each of these hard drives contains microchips. Marvell Technology Group (NasdaqNM:MRVL – News) makes 60% of the chips that go in smaller devices such as iPods.
Chips for micro hard drives generate most of the company’s business, though it also gets about 40% of revenue from chips for wireless and super-fast ethernet networks.
Chip demand from computer hard-drive makers such as Western Digital (NYSE:WDC – News), Maxtor (NYSE:MXO – News) and Seagate Technology (NYSE:STX – News) is high. And inventory is low, down to three to four weeks from the usual six to seven weeks, according to a report from Wachovia Securities analyst Karl Motey.
Analyst Charles Glavin of Needham predicts that by 2007, micro drives for cameras, cell phones, iPods and other gadgets will be a bigger market than computer drives. [Read the rest]