Goldman Sachs Group Inc cut its forecast for computer motherboard shipments, saying demand "is falling off a cliff."
Shipments of motherboards, an indicator of personal-computer sales, probably dropped 4.2 percent this month from the previous month, Goldman Sachs analyst Henry King (
The reduction may signal fewer orders of semiconductors and related components from PC makers because of lower demand. Much of the slowdown has been caused by Microsoft Corp's delay in introducing its new Windows Vista operating system, King wrote.
Microsoft earlier this year pushed back the introduction of the software for consumers, already two years late, until January.
A decline in shipments "happened earlier and more significantly than we expected," King wrote.
The Philadelphia Semiconductor Index dropped as much as 2.5 percent following the report by Goldman's Asia Pacific technology team, with National Semiconductor Corp, Intel Corp and Micron Technology Inc leading the decline. The index of 19 chip-related stocks slid as much as 11.48 points to 449.79.
King forecast motherboard shipments for the quarter will gain 8.8 percent, down from an earlier prediction for 10.8 percent growth. This month's decline compares with average month-over-month growth of 12.7 percent between 2001 and last year, he said.
The slide may also leave motherboard makers with oversupply, King said, prompting a possible price war. Shipments are tracked out of Taiwan, where computer makers including Dell Inc and Hewlett-Packard order their parts and have machines assembled.
"There's been some concern over inventory for a couple of quarters but it's coming to a head right now," said Greg Barlage, who helps oversee about US$35 billion at Baring Asset Management in Boston.
The delay to Microsoft's Vista may cut US$4 billion from PC sales this year, according to Gartner Inc.