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Technology Stocks : Semiconductor and Semi-Equipment Analysts - Their Calls -- Ignore unavailable to you. Want to Upgrade?

To: Jack Hartmann who wrote (56)	4/25/2000 9:56:00 PM
From: Jack Hartmann	Respond to of 195

Shortage of CPUs may hit earnings SHORTFALL: Analysts say a limited supply of Intel's microprocessors may affect the bottomlines of motherboard and PC makers in May and June AFP WITH STAFF WRITER, TAIPEI Sales for computer and motherboard makers may take a small hit in May and June because of Intel's microprocessor shortage, analysts say. "Some notebook computer makers such as Asustek (æ§à) Computer have already been notified by Intel that only 80 percent of their orders would be met," said Chien Kuo-chen, a researcher at President Securities. "This could hurt their revenues by 10 to 20 percent in the next two months." Still, Asustek expects to ship as many as 100,000 notebooks over the next two months and as many as 500,000 units for the entire year. This week, the company is expected to release financial forecasts, and analysts expect sales to reach a strong NT$70 billion this year. Asustek Computer deputy spokesman David Chang said he could not confirm whether the company has received notice from Intel that its microprocessor order will not be met. But Chang did say that the shortage would affect its production of motherboards. "Demand for motherboards made for Intel's CPU is expected to decrease as a result of the shortage," he said. Giga-Byte Technology, a major motherboard producer, also said its production from May would be affected by the shortage, but refused to say by how much. In 1999, Taiwan churned out 19.45 million computers, about 80 percent driven by Intel's central processing unit (CPU), said the Market Intelligence Center (MIC), a division of the Institute for Information Technology. President Securities' Chien said second-tier firms are expected to be hit hardest since priority will be given to bigger companies, particularly those with close cooperative relations with Intel. "Taiwan's leading computer makers and contracted manufacturers for IBM and Compaq would be least affected since their American clients would help them secure Intel's CPU supply," he said, referring to Acer Inc, First International Computer and Mitac International Corp. Taiwan's leading computer company, Acer Inc, confirmed the impact of the supply shortage on its production would be minimal. "We are usually given priority when there's a shortage because we have always maintained good relations with Intel on a long-term basis," a company official said. Another analyst at Grand Cathay Securities said the industry would no doubt be hurt by the shortage problem, but the impact would be less severe as some had anticipated since May and June were low season for computer sales. "The impact of Intel's shortage will be offset by lower demand in the two months," said the analyst, who declined to be named. "Besides, these companies can always turn to Intel's rival AMD [Advanced Micro Devices] for temporary supply," she said. In fact, the demand for AMD's microprocessors has been on the rise since Intel recently warned of supply shortage, she added. AMD is the world's second largest CPU provider, accounting for 20 percent of the Taiwan market. "The rising cost for computer production may further discourage demand, thus offsetting the negative impact of the shortage," said MIC researcher Hsieh Wen-pin. However, Intel would need to resolve the shortage problem by July when global demand for computers began to peak, said the analyst at Grand Cathay Securities. "AMD's current capacity is not enough to fully support the market," said the analyst, who estimated a 5 percent to 10 percent revenue decline for Taiwan's computer and motherboard manufacturers in the next two months. Other analysts say Intel's CPU shortage is overstated, noting that the dearth of microprocessors is for Intel's PIII and Celeron models. These high-end CPUs account for a small percentage of the microprocessor market compared to low-end CPUs. Motherboard makers also point out that sales in the first quarter have been strong and have even set records -- despite Intel's short supply condition, which has existed since last year. Technology stocks ended lower Friday despite a 0.1 percent rise in the stock market. Acer eased NT$0.50 to NT$60 and Giga-Byte Technology fell NT$4 to NT$201. taipeitimes.com ********** Not heard this before. Shows how strong the demand is though. Jack