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Acer Inc president says component shortage a threat

Acer Inc president Gianfranco Lanci has said a shortage of components, rather than the global credit squeeze, poses the biggest challenge to the personal computer industry, a newspaper reported yesterday.

Despite concerns over weaker consumer demand in the wake of the recent turmoil in financial markets, Lanci told the Financial Times the global credit crunch was not likely to affect PC sales.

"There are perhaps other consumer goods that are suffering, but if you talk about PCs, we don't see any major impact," the newspaper quoted Lanci as saying. "Even in the US, we don't see a change in demand right now."

But a shortage of components has raised Lanci's eyebrows, as he feels production capacity is still tight among PC makers.

Domestic rival Asustek Computer Inc (華碩電腦) confirmed last month a shortage of batteries, liquid-crystal-display panels, printed circuit boards and memory chips from the third quarter, especially for notebook computers.

Citi Investment Research said in a report dated Sept. 4 that component shortages should not have too much impact on Asustek's shipments as "its annual purchasing model has secured most key components."

But "from a 12-month view, our concern is still chipset and component shortages," Citigroup said at the time.

Lehman Brothers wrote in an industry report released on Sept. 18 that concerns over component shortages were easing, especially for first-tier PC clients.

With a stronger-than-expected demand in Europe and a steady growth in China during the back-to-school season, Lehman Brothers said it expected visibility in the PC industry to extend through to November.

Lanci warned that vendors should build up their inventories or risk production capacity shortages ahead of the Christmas shopping season.

He said Acer had built up 30 day inventories at the end of the second quarter.

"The investors didn't like it, but I'm sure they will like the end result," the newspaper quoted Lanci as saying.

Acer announced last month that it will buy Gateway Inc for US$710 million in a bid to overtake Chinese rival Lenovo Group Ltd (聯想).
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