Weak Prelim Q1 PC Numbers Has iSuppli Cutting FY13 Expectations (INTC) (HPQ)
Preliminary data compiled by the firm has PC shipments slipping 13.4 percent sequentially in Q113, the worst drop in 10 years. By comparison, shipments saw just a 10.3 percent sequential drop in Q109, when the financial crisis was peaking.
Due to the preliminary numbers coming in worse than expected, iSuppli now sees global PC shipment growth for the year being flat at best, versus prior expectations of a modest 3.4 percent gain.
iSuppli also sees netbook shipments falling 72 percent to an estimated 3.97 million units in FY13.
Intel (Nasdaq: INTC) may see a large impact on the slowdown as it works to gain further traction in the mobile device segment. Recent data has Intel with a 15.4 percent market share of the global semiconductor industry in Q12, about 4 points better than also-ran Samsung. In response to slowing, Intel was also trimming inventory faster than peers; iSuppli has the company cutting inventory 11 percent, or $585 million, from Q3 to Q412. AMD (NYSE: AMD) cut $182 million, or 25 percent, while STMicro (NYSE: STM) eased inventories $131 million, or 9 percent, over the same period.
“Intel was one of many major semiconductor suppliers that indicated in their fourth-quarter financial calls that inventories would be down or flat in the first quarter,” said Sharon Stiefel, analyst for semiconductor market intelligence at IHS. “These semiconductor suppliers kept their manufacturing capacity utilization rates relatively low to meet the projected overall reduction in demand in the first quarter. With orders for most semiconductor companies expected to pick up after the first quarter, a flexible, strategic approach to factory utilization and inventory reduction has been a key factor in maintaining profitability for most suppliers.
Other companies on watch as PC sales flounder include Hewlett-Packard (NYSE: HPQ) and Dell (Nasdaq: DELL), two giants in the industry.