Look everyone, PLEASE don't panic. Look at this as another buying opportunity. We've seen this before.
Dorine
UPDATE 1-Don't panic on Intel say Euro tech firms, analysts
UPDATE 1-Don't panic on Intel say Euro tech firms, analysts
(Updates throughout)
By Lucas van Grinsven, European technology correspondent
LONDON, Sept 22 (Reuters) - European technology shares were hammered on Friday after microchip giant Intel blamed
weak European demand for a cut in its third-quarter revenue
forecast, but companies and analysts said they saw no slowdown in PC sales.
"We don't see a reversal in PC sales," said semiconductor
analyst Nicolas Gaudois at Morgan Stanley Dean Witter.
Market research group IDC said preliminary data showed that
PC unit sales in Western Europe would grow by some 14.5 percent
in the third quarter, a big improvement over the respective 8.1
percent and 7.2 percent growth rates seen in the first and
second quarters.
"The fourth quarter is going to be strong also, with 19
percent growth," said IDC industry analyst Andy Brown.
Most of that growth would come from consumers who want
faster PCs to play digital video disc (dvd) games and benefit
from high speed Internet access.
BUSINESSES SLOW TO BUY NEW COMPUTERS
But corporate demand remained slack as companies saw few
incentives to invest in new computers after the upgrades ahead
of the millennium change.
"We're getting slightly conflicting signals," Brown said.
"There is some uncertainty whether the business market is
picking up."
This was underpinned by Asian-European computer maker
Fujitsu Siemens <6702.T> which told Reuters on Friday
that consumer demand was growing strongly, while it did not
expect the corporate market to strengthen in the fourth quarter.
Siemens was down 5.6 percent at 149.84 euros at 1145 GMT.
However, Dell Computer Corp. remained bullish. The
world's number two PC maker, which was off more than 10 percent
in U.S. after hours trading at $33-11/16, said it was still
expecting a recovery in European corporate demand for its
computers.
Compaq Europe , a unit of the world's largestPC
maker, was not immediately available for comment.
IBM Europe would not comment ahead of its third
quarter results announcement next month.
EUROPEAN SEMICONDUCTORS COMPANIES HIT
Worries over PC demand also hit the European semiconductor
industry, although most of them focus on making chips for
consumer products such as cars, mobile phones and CD-players,
rather than computers.
ST Microelectronics, the French-Italian semiconductor maker
which fell 5.4 percent to 57.70 euros, was not immediately
available to comment, but analysts say only 20 percent of its
business is related to the PC industry for which it makes hard
disk drive semiconductors.
Philips Semiconductors, a unit of Netherlands-based Philips
Electronics whose shares lost seven percent to 48
euros, said it was not exposed to PC sales.
"We're not in memory chips, so whatever Intel is saying, has
little impact on us," a spokeswoman said.
Even Europe's largest computer memory chip (DRAM) maker
Infineon , down 6.7 percent at 54.60 euros, would
hardly feel the impact of a few slow summer weeks in the way
Intel did.
As a mark of its confidence Morgan Stanley raised its 2000
earnings forecast for Infineon by 4 pct on Thursday. Recent
weakness in DRAM prices on the world spot markets was the result
of inventory selling, not slowing demand, it added.
Siemens, the parent company of the German DRAM maker said on
Friday its unit was in "excellent" condition. Infineon's Chief
Executive Ulrich Schumacher reiterated that fourth quarter
profits were expected to be higher than in the third quarter.
NORDIC MOBILE
Intel's announcement, saying it sees third quarter sales
rising only between three and five percent, also dragged down
tech companies which are entirely unrelated to the PC industry.
Nordic mobile phone companies Nokia and
Ericsson and French telecoms infrastructure to
handsets maker Alcatel , all shed between three and
five percent of their stock market value.
Investment bank Dresdner Kleinwort Benson on Thursday warned
that handset suppliers were heading for modest 20 percent
year-on-year revenue growth in the fourth quarter, after having
enjoyed growth in excess of 30 percent.
But Philips Semiconductors, which is one of the major
suppliers to the mobile phone industry, said there were no signs
of weakening.
"Demand continues to be strong," its spokeswoman said.
MORE
Rtr 08:37 09-22-00 |
