Not All Chipmakers Feeling the Boost

By Reuters  |  Posted 2010-10-13 Email Print this article Print
 
 
 
 
 
 
 

Intel's upbeat forecast for its fourth quarter sales and margins has raised hope that the technology sector could end the year on a strong note.



Analysts also warned that not all semiconductor makers would do as well as Intel.

Linear Technology Corp, which makes products such as amplifiers and voltage regulators, said on Tuesday its total bookings fell sequentially in the quarter.

"PCs have been beaten up a lot so sentiment is low enough that it's hard to disappoint," said Patrick Wang, an analyst at Wedbush.

Shares of Intel rose to $20 in extended trading after closing 1.07 percent higher at $19.77 on Nasdaq.

Its third-quarter net profit was $2.955 billion, or 52 cents a share, versus $1.86 billion in the year-ago quarter. That was slightly higher than the 50 cents per share expected by analysts.

Revenue in the quarter ended September 25 was $11.1 billion, slightly above the $10.99 billion expected.

Longer term, Wall Street remains concerned about the threat to Intel, whose microprocessor brains drive eight out of 10 of the world's personal computers, from the fast-growing tablet segment popularized by Apple's iPad.

"Consumers will have a limited amount of discretionary income and some will choose to purchase a tablet instead of upgrading an existing PC or purchasing a netbook in any given period," Otellini conceded on the conference call.

On top of soft U.S. and European demand, the PC industry has faced rising inventories for chips and other components that have led some customers to reduce their orders for new parts.

Global semiconductor sales could grow just 5 percent next year as the economy continues to struggle, according to market research firm iSuppli.

Intel's results were buoyed by a 3 percent sequential increase in data center sales, a business with higher margins than chips for PCs.

Some investors also believe tech vendors' sales will pick up in the final months of 2010 as shoppers warily spend on holiday gifts -- but an out-sized amount will go to smartphones and tablets while sales of PCs flounder.

Smith said computer manufacturers are using up stock to make way for the Sandy Bridge microchips due out early next year.

Intel would like to see its new microprocessors counted on to handle the mainstream graphics needs of new PCs, although manufacturers might continue to include specialized graphics chips in their products.

Intel's new chips are not expected to satisfy high-end users, such as gamers willing to splash out hundreds of dollars separately for top-of-the-line graphics cards. That market is now dominated by Nvidia and AMD.

Intel said that by early 2011 it should close its acquisitions of the wireless unit of German chipmaker Infineon for $1.4 billion and security software specialist McAfee Inc for $7.7 billion. Both deals were announced in August and seen as helping Intel establish itself in the fast-growing mobile market.

(Editing by Edwin Chan and Richard Chang) 

 
 
 
 
 
 
 
 
 
























 
 
 
 
 
 

Submit a Comment

Loading Comments...
























 
 
 
 
 
 
 
 
 
Thanks for your registration, follow us on our social networks to keep up-to-date