Sat, Feb 03, 2001 - Page 17 News List

VIA's chip sales increase after demand for PCs rise

By Dan Nystedt  /  STAFF REPORTER

VIA Technologies Inc (威盛), the world's number two chipset maker behind Intel, saw its first month-on-month sales increase since last September, when sales plummeted due to a slowdown in personal computer sales worldwide.

Although analysts say the sales increase indicates inventories of computer components in Taiwan may be clearing out, it's too early to say whether the rise in VIA chipset sales mean the PC market is turning around.

The company posted January sales of NT$3.088 billion (US$93 million). The figure was up by 91 percent over the same time last year and 33 percent higher than December sales.

"The AMD [chipset KT1338A] product was the one with the highest demand," said Manuela Mercandelli, spokeswoman for VIA. "We forecast this sales increase will last through February."

Despite a week off for Chinese New Year, VIA beat market expectations of a NT$2.8 billion sales target by a slim margin. The company's shares rose 2.6 percent to NT$280 on the Taiwan Stock Exchange.

News of a PC sales slowdown caused VIA sales to fall from NT$3.8 billion in August last year to NT$2.7 billion in September. The sales fall is surprising because the fourth quarter is usually a time of heavy back to school and Christmas computer sales. VIA sales revenue remained at the NT$2.7 billion level until falling further in December.

"Back in August or September, motherboard makers believed PC sales would not be as good as expected in the fourth quarter, and they cut chipset orders," said Henry King (金文衡), a senior analyst at Indosuez W.I. Carr Securities.

King called VIA's sales performance "outstanding" in light of a sluggish PC market. He also said the recent sales pickup is due to increased demand in Europe due to the appreciation of the euro. With the value of the European currency, rising against the dollar, PC prices have fallen across the continent.

Jumping in January

* Sales hit NT$3.088 billion (US$93 million).

* In the first month of the year sales were 33 percent higher than December.

* Sales were up by 91 percent over the same period last year.

* The company beat market expectations of a NT$2.8 billion sales target.

* Increased demand for personal computers in Europe, coupled with the appreciation of the euro, helped fuel chip sales.

Although demand rose for chipsets last month, analysts say it will take a few more months of high demand to convince them the PC market is turning around. Further, the market won't know until after the CEBIT computer trade show in Germany this March. A significant rise in orders to motherboard makers at the show would indicate a significant change in the PC market.

VIA's sales of its chipsets -- a component that links the microprocessor to the computer memory and other parts of the PC -- do point to declining inventories of PC components.

According to Sharon Su, an analyst at ABN-AMRO, component inventories have "been worked out significantly."

In the event of even a small rise in PC demand, sales of motherboards, chipsets and other PC components should rise quickly as well.

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