The share price of Acer Inc (宏碁) rose by an anemic 0.48 percent as the PC maker’s newly unveiled plan to acquire privately held cloud-computing company iGware Inc for US$320 million was given a thumbs down by investors, who worried that the expensive deal would not immediately help the company.
Shares in the world’s No. 4 PC maker increased NT$0.2 to NT$41.55, while the share price of the world’s No. 5 PC company, Asustek Computer Inc (華碩), advanced 1.02 percent to NT$296. The benchmark TAIEX went up 0.55 percent.
The “transaction appears expensive given iGware’s small scale,” Morgan Stanley said in a report yesterday.
Morgan Stanley said it expected “no material profit contribution in the near term. We think it will also be a challenge for Acer, a hardware--centric company, to lead and utilize a software company.”
Robert Cheng (鄭勝榮), who tracks the notebook computer industry for Bank of America Merrill Lynch, said in a report on Thursday that “Acer should stabilize its PC business first.”
That was despite the fact that the purchase of iGware would help Acer develop its cloud--computing services, which was good from a long-term point of view, Cheng said.
The acquisition of iGware “cannot generate sales or profit contribution in the coming two quarters at least and Acer’s cloud product might be launched in 2012. [The deal] cannot help Acer overcome its current difficulties,” he said.
On Thursday, Acer chairman J. T. Wang (王振堂) told reporters at a press conference that the acquisition of iGware would have a medium to long-term impact on the company.
“The deal will be crucial for Acer to boost its brand value in the next five to 10 years,” Wang said.
Acer is scheduled to unveil its first cloud-computing services, dubbed Acer Cloud, some time next year, enabling users of its hand-held devices to share data and synchronize files, among other things, Wang said.
However, Arthur Hsieh (謝宗文), an analyst with UBS Securities Pte Ltd in Taipei, said he was not sure whether iGware’s previous work for Japan’s Nintendo Inc could be considered successful given that it could not defend against the competition from Microsoft’s game console Xbox 360 with Kinect.
“A cloud [platform] without an attractive service is unlikely to add value to a brand and therefore it will not be a true differentiator,” Hsieh said yesterday.
UBS retained a sell rating on Acer and trimmed its 12-month target price on the stock to NT$38 from NT$40 previously.
Acer is expected to swing into the red in the second quarter because of US$150 million in inventory write offs and lower PC shipments as tablet devices cannibalize notebook computer sales, analysts said.
Acer would lose NT$4.85 billion (US$168 million) in the quarter from April to last month, while revenue would decline by 15 percent quarter-on-quarter to NT$108.76 billion due to weak demand in Europe, Morgan Stanley said.
Revenues from the European market account for 40 percent of Acer’s overall revenues, according to the PC maker.
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
RSS