Asian personal-computer makers, which are seeking to reduce costs to salvage dwindling profits, cautiously welcomed Intel Corp's plans to cut prices in the processor chips used in 77 percent of PCs worldwide.
The biggest chipmaker plans to cut prices on Pentium 4 chips by as much as 54 percent as the Santa Clara, California-based company works to recoup sales lost to rival Advanced Micro Devices Inc, analysts said. Intel spokesman Tom Beermann declined to comment.
Price competition between Intel and nearest rival Advanced Micro comes as Asian computer makers struggle to cut costs to improve profitability.
"We would use Pentium 4 in our PCs more if prices fell that much," said Susumu Sakamoto, a spokesman at NEC Corp, Japan's biggest PC maker. Sales of PCs using the high-speed chips are "really small" because NEC didn't start selling them until last November, he said.
The company now prices such PCs for corporate customers at about ?450,000 (US$3,636).
PC shipments in the second quarter fell in the first year-on-year drop since 1986. Mounting inventories have eroded earnings of PC makers and chipmakers this year.
While Samsung Electronics Co -- both a customer and a supplier to Intel -- welcomed a possible price cut, it doesn't expect it to have an immediate impact on chipmakers' earnings.
"It's a good signal for personal computer makers and chip manufacturers," said James Chung, a spokesman for the largest maker of computer memory chips.
"It could help the industry to pick up by the end of the year, but the third quarter is still going to be much tougher than the second."
Samsung is the only manufacturer in the US$30 billion-a-year memory chip business that is still profitable.
Sales of memory chips, over 70 percent of which go into PCs, are forecast to shrink as much as 40 percent this year.
Trigem Computer Inc, the largest producer of personal computers for companies such as Hewlett-Packard Co, doesn't expect a chip price reduction to have a major impact on computer prices.
Intel's price cut "will help computer makers because it will improve their margins," said YH Kwon, a spokesman for Trigem.
But "cuts in chip prices don't usually lead to cheaper computers." Intel may more than halve the cost of its top 1.8GHz Pentium 4 chip to US$260 from US$562 this month, Lehman Brothers analyst Dan Niles wrote in a note to clients yesterday.
The price for a 1.7GHz Pentium 4 will fall 45 percent, with low-end models dropping 30 percent to US$135, he said. Pentium 4, introduced in November, will move up to speeds of 2GHz in the fourth quarter, Niles wrote.
Chipmakers are facing one of their toughest years ever.
Worldwide PC shipments in the second quarter ended June 30 fell 1.9 percent from the same period last year to 30.4 million units, according to market researcher Dataquest Inc.
Advanced Micro has taken 22 percent of the PC-processor market, compared with 16 percent a year ago, according to Mercury Research. Intel's share has slipped to 77 percent from 83 percent.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from