<Do you think they mean the shortage caused by availability of motherboards due to Taiwan's earthquake and problems at Intel?>
Robert, here are some snippets from briefing.com today. They seem to indicate the traders are now out of their positions and they can now tell the public what's happening. They seem ready to tell us that PC makers are going to have problems for the reasons you mentioned; higher component prices due to Taiwan, and failure of the next hot product, Rambus, to make the grade and drive high end PC demand.
So, the model for 4 days inventory at Dell might get a challenge. They would have done well to stock up on some DRAM chips this time. If ASP's do go up, this will seemingly help many troubled firms like Samsung. In fact, this earthquake was probably very good for Korea.
It'll hurt disk drives as they have lots of capacity and now the high end will be slower. Bulk of PC sales will drift again to lower ASP's. It might be that lap top sales will be hurt and this will hurt IBM's profitable portable HDD sales.
Anyway, if these analysts are starting to see a problem develop, they might be signaling the beginning of something. Let me know what you think and where you see problems and bargains. I suppose software will do well, and I bought some Tivo yesterday. Don't know enough about their manufacturing model, but it sure does look like their disk drives will continue to be cheaper and cheaper components.
Regards, Mark
09:38 ET Rambus (RMBS) 61 7/16 -4 13/16: According to SG Cowen's morning technology letter "Radar", Samsung has halted production on Rambus DRAM until Camino chipset problems are resolved. Cowen calls Samsung a big Rambus supporter, and says the move could result in further delays in RMBS adoption.
09:23 ET Cypress Semiconductor (CY) 21 1/2: SG Cowen's Drew Peck raises estimates on CY1999 to $0.73 from $0.71 and to $1.50 from $1.45 for CY2000; still rates stock a "strong buy" and says that earthquake-related supply issues will be negligible.
08:53 ET Dell Computer (DELL) 41 13/16: --Update-- More on the Dan Niles downgrade of Dell -- he says that supply issues related to the Taiwan earthquake and the Camino chipset delay will result in lower than expected revenue. He lowers revenue growth estimate to 9% from 12% for Q3 and to 9% from 11% for Q4; also lowers EPS estimate to $0.74 from $0.77 for CY99, but maintains CY00 revenue and EPS estimates.
08:50 ET Hewlett Packard (HWP) 90 3/4: According to Dow Jones, HWP's CEO Fiorina says that revenue growth will be at the low end of the expected 10-13% range.
08:25 ET Apple Computer (AAPL) 63 5/16: CSFB cutting 4Q99 estimate from $0.76 to $0.45; left FY00 revenue estimate unchanged at $7.6 bln and earnings at $3.15 bln; cites chip shortage from from MOT for the G4 and limited production for the iBook; maintains "buy".
08:23 ET Dell Computer (DELL) 41 13/16: Banc Boston Robertson Stephens analyst Dan Niles downgrades DELL to a "long term attractive" from a "buy".
Dell Computer (DELL) 41 13/16: Continues to fall in pre-market after yesterday's caution from CSFB's analyst, Michael Kwatinetz, that he sees a sees a 20% possibility that Dell will take a 5% hit on revenues from Taiwan earthquake; trading at $40 3/4, down 1 1/16. |
