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HTC rebuts report chip shortage will affect Q1 revenue

High Tech Computer Corp (HTC, 宏達電), the biggest maker of mobile phones running Microsoft Corp's system, denied that first-quarter sales would be adversely affected by a shortage of chip supply from Qualcomm Inc.

Shares of HTC slid 0.37 percent to NT$538 yesterday after the Chinese-language Commercial Times reported that the company could suffer around a 40 percent quarterly decline in revenues because of the chip shortage.

"Component supply is tight, but we have everything under control. The company does not expect the shortage to have an impact on its fundamentals in the first quarter," HTC spokesman Cheng Hui-ming (鄭慧明) said in a filing to the Taiwan Stock Exchange.

Vincent Chen (陳豊丰), a technology analyst at CLSA Ltd (里昂證券) Taipei, confirmed that there is currently a shortage of a number of components, but said "we are uncertain about the impact."

He said, however, that "a supply constraint in the first quarter was "unlikely as it is usually the slack season."

HTC's sales in the first quarter of next year could drop about 24 percent sequentially to NT$29.5 billion (US$908 million), compared with an estimated NT$39 billion this quarter, Chen said.

Chen's forecast is lower than the consensus forecast of between NT$32 billion and NT$33 billion.

HTC also said yesterday that the the termination of an agreement to develop a new phone code-named V920 for European mobile operator Vodafone would not erode its fourth quarter sales.

The decision came "in consideration of research resources arrangement and [change in] product portfolio," HTC said in a statement.

In October, HTC told investors that revenues would expand by 20 percent this quarter from NT$29 billion last quarter, helped by sales of its new own-brand handsets.

Chen raised HTC's rating to "buy" from "underperform" last Wednesday with a price target of NT$731, citing its improving brand business.
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