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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Captain Jack who wrote (67916)	9/25/1999 9:20:00 AM
From: Elwood P. Dowd	Respond to of 97611

Sorry if the following has already been posted. El Friday September 24 4:37 PM ET Intel, Other Tech Stocks, Fall On Taiwan Worries SAN FRANCISCO (Reuters) - The shares of Intel Corp. (Nasdaq:INTC - news) and some other chip makers tumbled Friday, as Wall Street analysts began warning this week's earthquake in Taiwan could have a worse-than-expected impact on the fourth quarter. Tuesday, a massive earthquake that registered 7.6 on the Richter scale hit Taiwan, killing more than 2,100 people, toppling buildings, cutting power to most of the island -- and halting operations at Taiwan's semiconductor plants. Taiwan supplies 10 percent of global chip demand and is also home to the industry's largest foundry, Taiwan Semiconductor Manufacturing Co., which manufactures chips for many of the world's semiconductor sellers. ''People were being strangely complacent about Taiwan. The estimates for the impact were absurdly low,'' said Drew Peck, an analyst at SG Cowen & Co. ''Three weeks of production (will be lost), when capacity is already tight. Chip sets are largely sourced out of Taiwan and that will be a major restraining force on PC sales in the fourth quarter.'' The shares of Intel -- which supplies over 80 percent of the microprocesssors to PC makers -- tumbled $1.83 to close at $75.67 and the company was the most actively traded stock on Nasdaq. Thursday, Peck told his sales force that he planned to cut his earnings estimates on Intel, but he was waiting for more data on the production slowdown in Taiwan. ''PCs are going to be hit hard,'' Peck said, adding that most of the motherboards, graphics chips and chip sets that are standard in PCs are made in Taiwan. Analysts said shortages of these parts will ultimately hurt personal computer makers and they will face component shortages in the fourth quarter, which is typically the industry's most important period. ''Taiwan's earthquake could have an impact on fourth quarter PC shipments,'' said Richard Gardner, a Salomon Smith Barney analyst, in a note to clients. ''In our view, final assembly operations will bounce back fairly quickly once electricity is restored. We are therefore more concerned about potential semiconductor shortages,'' he added, particularly shortages of memory chips, graphics chips and other customized specialty chips. Gardner said Taiwan supplies 55 percent of the world's motherboards, the main boards that hold all the chips in PCs; 11-12 percent of the world's memory chips; and more than 80 percent of the world's graphics chips. Friday, BancBoston Robertson Stephens analyst Dan Niles added to the pressure on Intel, saying Intel has had some order cancellations in the current third quarter due to weaker-than- expected PC demand. ''We also expect that the potential delay of DRAM components and motherboards coming from Taiwan could cause problems as we ramp toward Christmas,'' Niles said. He added that even a one-week delay can be critical. The shares of many other chip makers and some chip equipment makers, which supply equipment to the semiconductor industry, were off. Rambus Inc. (Nasdaq:RMBS - news), developer of a technology for creating faster memory chips, tumbled $16.38 to $71.13. Applied Materials Inc. (Nasdaq:AMAT - news), the biggest maker of chip equipment, was flat, closing at $78.88. Search News Stories Search News Photos Sep 24 \| Sep 23 \| Sep 22 \| Sep 21 \| Sep 20 \| Sep 19 \| Sep 18 \| Sep 17 \| Sep 16 \| Sep 15 Home \| Top Stories \| Business \| Tech \| Politics \| World \| Local \|