The global computer industry is picking up but the telecommunications sector is still stuck in a rut, Craig Barrett, president of Intel Corp, the world's number one chipmaker, said yesterday.
"We have good visibility into most of the computer manufacturers around the world. We can see what their inventory levels look like. We anticipate the normal seasonal uptick in the second half -- the back-to-school portion and then the holiday buying season at the end of the year," Barrett told CNN.
Speaking from Taiwan, Barrett said manufacturers had reduced inventories to a manageable level.
"What we have seen is a decrease in demand associated with the slowdown in the US and then the parallel slowdown we've seen in Europe," he said.
The telecoms industry, however, was a different story.
"The communications part of the business is still weak and I think is suffering from a combination of over-investment and the recessionary trend in the US," he said.
Chip makers across the globe have been cutting capacity and prices to maintain market share in the face of a steep drop in demand.
But Barrett said he would not describe the price-cutting as excessive. He said demand from India and China was buoying Intel's revenues in Asia, which account for about 30 percent of the chip giant's global sales.
Intel had also enjoyed its best quarter ever in Latin America. "Some of the emerging economies are still putting their infrastructures in place and are still investing heavily in the computer sector," he said.
In some more mature economies, by contrast, including Europe and Japan, demand was suffering, Barrett said.
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