Intel CEO says PC sales 'bottomed out' in first quarter

POLITICAL ECONOMY

'Collapse' in semiconductor demand hits ASML
Dutch computer chip equipment maker ASML on Wednesday announced net losses for the first quarter after a collapse in sales, but said it saw signs of improving market conditions. It swung to a loss of 117 million euros (155 million dollars) against a profit of 145 million euros for the same period in 2008. Sales, which reached 184 million euros in the first quarter, were a fifth of the figure of 919 million euros for the same period last year. ASML chief executive Eric Meurice said in a statement that "semiconductor equipment demand collapsed in the first quarter of 2009 as customers went through inventory corrections and production capacity adjustments." The results were in line with the expectations of financial analysts surveyed by Dow Jones Newswires, who predicted an average loss of 115 million euros and sales of 190 million euros. The Dutch company said it expected second-quarter sales to be between 210-230 million euros and that a pick-up in demand was underway. "Although we will continue to be affected by the global economic recession and very limited capacity demand, we are seeing signs of a pick-up in technology purchases from the current low run rate", Meurice said. US chip maker Intel Corp. said Tuesday it is also seeing signs of an improvement in the computer market, driven by consumer spending on technology products. It said the chip industry is returning to normal seasonal patterns. ASML is the world's largest maker of lithography systems, which map out tiny electronic circuits on silicon wafers. It counts Intel, Samsung Electronics Co. Ltd. and Taiwan Semiconductor Manufacturing Co. among its customers. ASML's shares closed at 14.60 euros on Tuesday. They have fallen 4.6 percent in the past year, outperforming the AEX market which has fallen 47.4 percent.

by Staff Writers
New York (AFP) April 14, 2009
Intel reported a steep decline on Tuesday in first-quarter net profit but the head of the world's biggest computer chip-maker said he believed personal computer sales had "bottomed out."

The Santa Clara, California-based company said net profit in the first three months of the year fell 55 percent to 647 million dollars compared with the same quarter last year.

Earnings per share were 11 cents, better than the three cents per share expected by Wall Street analysts.

"We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," Intel president and chief executive Paul Otellini said in a statement.

"Intel has adapted well to the current economic environment and we're benefiting from disciplined execution and agility," Otellini said. "We're delivering a product portfolio that meets the needs of the changing market."

First-quarter revenue fell 26.16 percent to 7.14 billion dollars, better than the 6.98 billion dollars expected by Wall Street analysts and the 7.0 billion dollars previously forecast by Intel.

"Business sales of all types are going to be constrained for a while," Otellini said in a conference call with analysts. "Enterprise budgets are locked down pretty tight."

Citing "current uncertainty in global economic conditions," Intel declined to provide a revenue outlook for the current quarter.

"For internal purposes, the company is currently planning for revenue approximately flat to the first quarter," it said.

Intel gained 0.19 percent in trading on Wall Street on Tuesday but lost 5.25 percent to 15.17 dollars in electronic after-hours trading.

Market research firm Gartner Inc. reported last week that worldwide semiconductor revenue fell by more than five percent last year to 255 billion dollars and could face a "far worse" decline this year.

Gartner said Intel retained its number one position last year for the 17th consecutive year and increased its market share to 13.3 percent although its revenue declined 0.5 per cent to 33.8 billion dollars.

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POLITICAL ECONOMY

China has no reason to stop buying US treasurys: Fed member

Hong Kong (AFP) April 14, 2009
A senior US Federal Reserve board member on Tuesday said he had no reason to believe that China would stop buying US Treasury bonds, amid concerns about the strength of the assets.

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