“The worst is now behind us.” Intel CEO Paul Otellini made that brave statement back in April. And not a month later, it’s proving true. Commenting on Intel’s business during an event for financial analysts Tuesday, Otellini said, “Looking at order patterns, billings patterns, it’s a little better than expected.“
Well, look at that. Floundering though it is, AMD has managed some gains in the semiconductor market. According to IDC, the company’s share of the chip market hit 22.3 percent during the first quarter of 2009, an increase of 4.6 percent over the fourth quarter of 2008. Meanwhile, Intel’s share fell to 77.3 percent, a decline of 4.7 percent.
After three years, AMD is finally getting around to merging it’s microprocessor and graphics divisions, another stab at reaching profitability after more than two years of losses. On Wednesday afternoon the company said it would consolidate the two divisions into one–platforms and products–led by SVP Rick Bergman.
“Sponsors of Tomorrow” is the new “Intel Inside.” The chipmaker is gearing up to launch a massive new advertising campaign, and that slogan is to be its anchor. Its purpose: to make us all more familiar with the Intel brand–as if it wasn’t ubiquitous enough already.
Emulex dissed and dismissed an unsolicited bid from Broadcom this morning saying it “significantly undervalues Emulex” and is not in the best interests of shareholders. In a blistering letter appended to the rejection announcement, Emulex CEO Paul Folino described Broadcom’s unsolicited $9.25-a-share cash takeover offer as “an opportunistic attempt to take advantage of Emulex’s depressed stock price” in a souring economy.
No big surprises here. The souring economy and related uncertainty in consumer and enterprise technology markets continue to drag the chip sector down into the mud. While world-wide sales of semiconductors in March rose 3.3 percent from February, they were down nearly 30 percent from last year.
Apple has fleshed out its chip design group with another key hire. The company has recruited Bob Drebin, former CTO of AMD’s Graphics Products Group, as a senior director. Apple won’t say what it is exactly Drebin’s going to work on, though it’s a safe bet it’s related to the multicore graphics processors in which Drebin has his expertise.
If it is chip sales that will lead the recovery, don’t expect one for quite some time. World-wide sales of semiconductors slumped 30 percent to $14.2 billion in February, the Semiconductor Industry Association said Friday. That’s down 7.6 percent from January levels.
To see just how badly the continuing erosion of consumer confidence is affecting the chip industry, one need only look at the pitiable state of National Semiconductor. After announcing third-quarter revenues that were down 31 percent from the previous quarter and 36 percent from the same period a year earlier, the company said today it would sack more than a quarter of its workforce.
January is historically a relatively weak month for the semiconductor industry, so the fact that the industry suffered a decline in world-wide sales last month isn’t unusual or shocking. Sadly, the same cannot be said for the depth of that decline, which was nothing short of grotesque.
Intel and Taiwan Semiconductor Manufacturing Co. are scheduled to announce a strategic partnership later today, one that could see Intel outsourcing some chip production to TSMC, the world’s biggest chip foundry. Details on the alliance are slim, but reports in Chinese media and elsewhere suggest it will involve Intel’s popular Atom microprocessor.
More gloomy predictions for the IT market. Market research firm IDC just updated its forecast for world-wide IT spending in 2009, and suffice to say, it’s not pretty. The continued downward spiral of the economy has so hampered growth that IDC now sees world-wide IT spending growing by just 0.5 percent year over year, down from a November 2008 forecast of 2.6 percent growth.
The vicious beating the semiconductor industry has taken this past year is nearly over. But it will be three years until it recovers–and even that prediction is an optimistic one. So says Morris Chang, Chairman of Taiwan Semiconductor Manufacturing, who believes the chip industry is “pretty close” to the bottom.
Given this morning’s morbid 2008 sales report from the Semiconductor Industry Association, the fact that chip equipment supplier Applied Materials lowered guidance for its first quarter is hardly surprising. Applied slashed its earnings forecast today, saying it expects sales for Q1 to suffer, thanks to the “deteriorating financial condition” of its customers.
John Paczkowski has been poking fun at the tech industry and the personalities that drive it since 1997. From 1999 to 2007, he wrote the award-winning tech news Web log Good Morning Silicon Valley for the San Jose Mercury News, Silicon Valley's daily newspaper. Read more »
Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.
Best use of the Beeker “meee” ever.
While the technology behind the Telephone is new, the design is reassuringly old-fashioned, reminiscent of a phrenologist’s horn or ear-candle in form. We found the experience far more comfortable than the one we had with the Telegraph.
12:58 AM: Breakfast: Two schools of fish from Tokyo Bay. Calories: 782,000. How I was feeling when I ate this: confused, irradiated, hating my size.
11:37 AM: Exercise: “Taxi Stomp” (alternating legs, for 30 blocks). Calories burned: 148,900,183.
1983. The Beatles announce their first tour in thirteen years, but likewise announce that Michael Jackson will be going on tour with them as a one gigantic mega-concert event.
Best video mashup ever.
A Facebook Memorial
Wow.
Worth it for the Rickrolling photo alone.
Excellent.
Flughumor!
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