Chips Are Up, but Economy Isn't
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Semiconductor sales are good, and the high-tech sector is strong, but analysts worry that U.S. mortgage market woes will affect economies worldwide.
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A familiar story: Earnings are up, but the stock is down. Is value piling up within the stock?
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com September 21, 2004, 5:22 PM PT. With the economy slowly turning up, upgrading hardware has been on businesses radar in the past 12 months as their number two priority.
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Chipmaker reports record sales of server and notebook processors, but net income dips.
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com September 14, 2004, 10:45 AM PT. With the economy slowly turning up, upgrading hardware has been on businesses radar in the past 12 months as their number two priority.
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Chipmakers are again investing heavily to avoid the mistakes of the 1990s. But can they compete with overseas rivals and avoid a glut?
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com September 21, 2004, 10:08 AM PT. With the economy slowly turning up, upgrading hardware has been on businesses radar in the past 12 months as their number two priority.
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(InfoWorld) - News coming out the chip sector has been great so far this week, but analysts warn that economic woes such as the housing mess might still spoil the party. The consensus among analysts appears to be that corporate and personal spending on technology products will be hurt by the housing issues in the U.S., but nobody knows how bad the impact will be, according to Peter Sutton, head of research at CLSA Asia-Pacific Markets in Taipei. Demand for technology products, especially computers and mobile phones, in the rest of the world is going strong, he said, but even that demand could pull back in the event of a U.S. slowdown because many developing countries depend on exports to the U.S. for income. By the end of this year, people should know how bad the loan and home foreclosure situation will be, according to Sutton. The housing market in the U.S., he said, is expected to bottom in the first quarter of next year. The fear is that the housing issues could hurt consumer spending at some point later this year, but so far the technology industry isn't showing any signs of trouble. The flow of good news started in Asia on Monday with the world's largest contract chip maker, Taiwan Semiconductor Manufacturing Co. (TSMC), reporting record high sales in August and revising up its third quarter financial guidance. The company, considered a bellwether for the overall tech industry because of the variety of gadgets it makes chips for, said consolidated sales in August rose 10 percent year-over-year to NT$30.02 billion (US$907.0 million), beating its previous record of NT$27.96 billion from July of last year. TSMC also predicted its third quarter revenue will likely hit between NT$87 billion to NT$89 billion, higher than a previous forecast of NT$85 billion to NT$87 billion, and said its gross margin would come out at the top end of expectations. Some customers asked TSMC to ship some chips earlier than expected, a spokesman for the company said, but the company won't comment on how that might impact the fourth quarter. Taiwanese chip designer MediaTek followed up TSMC's news, announcing an agreement to buy certain telecommunications chips products from Analog Devices Inc., of Norwood, Massachusetts, for US$350 million in cash. The deal itself isn't huge, but merger and acquisition activity normally takes place when companies see bright prospects for the future, and MediaTek is looking to use the acquisition as part of its mobile phone chip strategy. Among the products the company acquired is a chipset used in TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) basebands and radio receiver products, which will help it increase its presence in its main market, China. TD-SCDMA is the 3G (third-generation) telecommunications standard being pursued in China. Positive corporate news for chip makers didn't stop in Asia. As the work day opened in the U.S., technology industry watchers were treated to theÂ long-awaited launch of Barcelona, the new quad-core processors from Advanced Micro Devices. The Sunnyvale, California company announced a number of companies are already using the chips, including IBM, Sun Microsystems, Dell, and Gateway. The world's largest chip maker capped Monday with the biggest news of the day.Â Intel raised its third quarter revenue forecastÂ to between US$9.4 billion and US$9.8 billion from a previous range of US$9.0 billion and US$9.6 billion, and said its gross margin would be at the upper end of guidance due to stronger than expected global demand for computing products. Despite the strong chip news and outlook for the current quarter, which ends Sept. 30, the future remains uncertain. "Near term data shows little evidence of order cutbacks in the tech supply chain," said Warren Lau, chip analyst at Macquarie Research Equities. "But having said that, the question remains: will the sky come crashing down because of the meltdown in the U.S. subprime markets?"
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With the economy slowly turning up, upgrading hardware has been on businesses radar in the past 12 months as their number two priority.
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Intel-rivaling chipmaker does not immediately explain why its first-quarter sales will fall short of its previous estimates.
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Payrolls rise just 112,000 in November. Intel spurs the chip sector with a strong revenue guidance boost. IBM may want to sell its PC business.
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Not everyone wants the market to keep going up.
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com October 1, 2004, 11:39 AM PT. With the economy slowly turning up, upgrading hardware has been on businesses radar in the past 12 months as their number two priority.
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Advanced Micro Devices has been facing profit pressure--but new chipmaking techniques are giving it more room to lower prices.
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The traditional third-quarter bump is light for the chipmaker, as lower-than-expected PC sales offset flash memory gains.
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Chip giant isn't content dominating the PC and server markets. It wants to make gains in mobile phones, where competition is stiffer.
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NEW YORK - A fresh upturn in oil prices left stocks mixed Friday even as a satisfactory report on durable goods orders provided new evidence that the economy might be gaining traction. Downbeat outlooks from a pair of microchip makers weighed on tech stocks...