WiredWX Hobby Weather ToolsLog in

 


descriptionIntel: Price drop on Flash memory double earlier predictions EmptyIntel: Price drop on Flash memory double earlier predictions

more_horiz
Chip industry has been hit by overcapacity


Intel Corp. CEO Paul Otellini said yesterday the company has seen price erosion for certain memory chips in the first quarter that is nearly twice what it had predicted.

Otellini said Intel's forecast for price erosion from the fourth quarter to the first quarter in NAND flash memory chips was 27%. The actual figure it observed is 53%.

The result of that pricing erosion was a "substantially lower product margin" and higher inventory write-downs.

Intel late on Monday cut its gross margin forecast for the current first quarter, citing weaker pricing on certain memory chips known as NAND flash memory, used in cell phones and digital music players.

That portion of the chip industry has been hit by overcapacity, some slowing demand among consumers and intense price competition among Intel, its joint-venture partner Micron Technology Inc. and Asian chip makers.

Intel said on Monday it now expects a first-quarter gross margin of 54%, plus or minus a point, versus a previous forecast for 56%, plus or minus a couple of points.

Otellini also reaffirmed what he called an aggressive plan to move into what Intel sees as a rapidly growing market for PCs — both desktop and notebook — costing as little as $250.

"While we've gotten more efficient in the core business, we've put more investments in where we think the growth of the company is going to come from," Otellini said.

The company on Sunday announced it had picked "Atom" as the name for a new class of microprocessors aimed at the market it has dubbed netbook PCs, as well as emerging consumer devices.

Intel aims to have Intel chips spanning the digital market from so-called mobile Internet devices all the way to high-end computer servers that form the backbone of corporate networks.

Otellini also said at the company's headquarters in Santa Clara, Calif., that he expects Intel to start shipping more chips manufactured using 45-nanometer chip-making technology in the third quarter than those produced using the previous 65-nanometer process.

"It's as aggressive as we said a year ago and on-track," Otellini said.

Sean Maloney, head of worldwide sales and marketing for Intel, said at the meeting that inventories of chips, chip sets and other components that Intel tracks are in line.

"There isn't really any significant buildup of inventory," Maloney said.

Stacy Smith, Intel's chief financial officer, said he has been pleased with the progress Intel made in the past two years in restructuring Intel and ensuring that its operating profit margin would grow at a faster rate than revenue growth.

"The goal is to continue that," Smith said. "I think we're very well positioned for growth."

He also said that he expects Intel's dozen or so chip-making plants around the world to be running at about 90% of capacity in 2008 and 2009, a figure he called ideal because it leaves Intel some flexibility to crank out more chips if demand is stronger than expected.

descriptionIntel: Price drop on Flash memory double earlier predictions EmptyRe: Intel: Price drop on Flash memory double earlier predictions

more_horiz
yay. cheaper things lol
privacy_tip Permissions in this forum:
You cannot reply to topics in this forum