Our analysts attending the Asia technology Conference at HongKong confirm two major Trends in the industry – Enterprise Spending Picking Up and Strong DRAM Pricing.
Enterprise Spending – Both Lenovo and Infosys seem to see a pick-up in activity in the US. While Europe hasn’t recovered yet, Lenovo believed that it sees some early signs of stabilisation—from our perspective, macro indicators point towards a recovery in the coming quarters. Tech Mahindra, said enterprise services business is starting to see an uptick in discretionary spend again. Overall, we believe that a continuing pickup in enterprise tech spending remains a key theme in tech.
DRAM PricingThe demand for DRAM bits is increasing as a larger proportion of demand is now coming from mobile applications (as opposed to PC applications) where both the unit growth and the density increase remain robust. Participating companies from the memory space made strong arguments supporting continued supply tightness for DRAM in 2014 and possibly in 2015. In addition to the consolidation theme in the sector, capex increases are also likely to remain in check because of the lack of a clear path for technology migration beyond the next couple of nodes.