| | | PC Sales Are Strong. That's Good News for Chip Giants Intel and AMD. -- Barrons.com
DOW JONES & COMPANY, INC. 1:36 PM ET 5/28/2021
Symbol Last Price Change | INTC | 57.185 | -0.545 (-0.944%) | | AMD | 80.445 | +2.025 (+2.5822%) | | QUOTES AS OF 01:42:21 PM ET 05/28/2021 |
Max A. Cherney
Three large personal-computer companies reported powerful results Thursday. The chips that power such machines are also selling at record levels, which is likely to be a positive sign for the rest of the year, according to a Citi Research analyst.
Together Lenovo , HP (HPQ), and Dell Technologies (DELL), represent 63% of PC-market share, according to Citi Research analyst Christopher Danely. In a Friday client note, Danely wrote that the three companies reiterated how tough it is to get their hands on computer components, and that Lenovo expects the shortages to last for 12 to 18 months.
Lots of demand for computers built by the likes of HP is a good sign for chip companies making components that they use. For Intel(INTC) and Advanced Micro Devices(AMD) , PCs were roughly half of last year's revenue, and Micron Technology (MU) counted about a quarter of revenue from such products, Danely wrote. Intel(INTC) makes central processing units, or CPUs, while AMD designs CPUs, and graphics chips. Micron makes flash memory and dynamic random access memory, or DRAM.
Danely cautioned that notebook shipments in April were weak, dropping 13% compared with March, and 9% below his team's expectations.
"We continue to monitor PC space, as we expect PC demand to roll over at some point," Danely wrote.
Lenovo said that it was experiencing a low level of inventory, and that supply shortages -- in part because of a global shortage of chips -- would last as long as a year and a half. Rivals Dell and HP also discussed shortages, Danely noted.
Longer term, Danely expects there to be a price war between AMD and Intel(INTC), but it isn't clear when such competition would heat up.
According to data from Mercury Research, first-quarter CPU shipments dipped slightly from the year-ago period, but remained relatively strong -- the second-highest in history. Total PC processor shipments rose 41% in the first quarter, compared with a year ago, which is the greatest growth since 1996.
Intel (INTC) has an 81% share of the desktop CPU market, and an 82% share of the laptop market, according to Mercury's data. AMD captures the rest, with its share of the desktop CPU market up 0.7% from a year ago, and its laptop-market share up 1%.
Intel (INTC) stock is down 0.8% to $57.23 in Friday afternoon trading, as rival AMD's shares are up 2.5% to $80.35. Memory maker Micron is seeing shares up 0.7% to $84.48. The PHLX Semiconductor Index rose 1.1% Friday.
Write to Max A. Cherney at max.cherney@barrons.com |
|
