Infineon and Micron wary on 2003 chip demand recovery
(09/04/02 10:44 a.m. EST)
SHANGHAI (Reuters) - Global chipmakers said in Shanghai on Wednesday that 2003 could be tough on their profits as low corporate demand for computer technology amid global economic uncertainty keeps chip prices under pressure.
Executives from Infineon Technologies AG (IFXGn.DE) and Micron Technology Inc (MU.N) told Reuters that shaky stock markets and U.S. threats of action against Iraq were convincing firms to put IT spending on hold, hurting chip prices.
``Profits, at least initially, are going to stay under pressure (in 2003) because of the prices, but we see looking backwards that volumes have picked up on a global basis, especially in Asia,'' said Peter Bauer, executive vice president for sales and marketing at German chipmaker Infineon.
Infineon, the world's sixth largest chipmaker in terms of sales, was less upbeat on Wednesday about the rest of 2002 than it was in July when it reported an operating loss of $106.6 million.
``We don't see a major change in terms of high growth coming back in the next one or two quarters,'' Bauer said of sales and profits.
``We're going to see sequential growth from quarter to quarter in all segments and in total, but we are cautious about the outlook.''
U.S.-based Micron Technology Inc, which designs and makes memory chips, said the Christmas season would offer some relief to this year's results as consumers buy digital cameras, video game consoles and personal computers.
``But to be honest, until we really see an uptick in corporate IT spending, I'm not terribly bullish,'' Mike Sadler, Micron's sales director, told Reuters.
He said jittery U.S. stock markets and President Bush's public remarks advocating action against Iraq were halting corporate IT spending, which in turn was wreaking havoc on volatile memory chip prices.
``I have no idea what prices are going to be doing next year,'' Sadler said.
Infineon's Bauer said he expected corporate demand to improve in 2003, but declined to say when.
``We are expecting the market to grow again double digits next year in total, and also we're expecting a pickup on the PC side, the enterprise side,'' he said.
Munich-based Infineon's shares were down 2.07 percent at 10.39 euros at 5:37 a.m. EDT.
Boise, Idaho-based Micron's shares closed down 1.3 percent at $17.01 in New York on Tuesday, against a 4.15 percent drop in the Standard & Poor's 500 index (.SPX). ($1-1.004 Euro) |
