Micro-Star International Co (微星) and other Taiwanese makers of the boards that house the basic components of personal computers said sales rose last month from the same month a year ago, one of the first signs their customers may be expecting a recovery in PC demand later this year.
Micro-Star, Taiwan's second-largest maker of motherboards, said sales in July rose 58 percent from a year earlier to NT$4.89 billion and gained 20 percent from June. Smaller rival Gigabyte Technology Co (
As an indication of future PC demand, investors and analysts typically watch motherboard shipments, particularly those to PC makers in Asia who make machines for US computer companies such as Hewlett-Packard Co on a so-called "OEM" basis.
"For the first time we are starting to see OEM orders," said Jonathan Ross, the head of technology research at Goldman Sachs Asia LLC in Hong Kong. For chipmakers, "it's not great now but shooting ahead two weeks we are expecting something a bit more encouraging."
Motherboards are the first item a computer maker buys and an increase in sales may suggest PC makers are beginning to load up on other components such as memory chips, video cards and hard-disk drives in anticipation of stronger sales, analysts said.
Memory-chip makers such as Samsung Electronics Co, the world's biggest maker of the devices, may be among the first to benefit from a surge in motherboard shipments.
That would be good news for an industry still trying to recover from last year's losses. According to Dataquest Inc, a unit of Gartner Group, the memory-chip market shrank by 62 percent to US$11.9 billion last year and prices continue to tumble.
In the past month, the price of the chips that provide the main memory for personal computers have collapsed to below the cost of production. The spot price of the benchmark 256-megabit dynamic random-access memory chip has fallen a quarter in the past month. The smaller 128-megabit chip's price has fallen 26 percent.
"Back-to-school demand isn't there," said Shizuka Ishikawa, president of Tomen Devices Corp, which sells chips and flat panels made by Samsung to Fujitsu Ltd, Japan's biggest business computer maker.
Intel Corp, the biggest chipmaker, may help by introducing faster versions of its Pentium 4 processors and cutting prices of older models.
The introduction of the new processors may prompt consumers to buy new computers and encourage manufacturers to add more components to maximize the impact of a faster main chip.
Industrywide, PC shipments dropped last year for the first time since 1985, according to market researcher IDC.
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