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CommentsAs PC markets start to recover from the recession, the world’s biggest manufacturer of computer chips emerged with a 12% increase in sequential sales amounting to $8 billion, falling lower to last year’s sequential sales of $9.4 billion for the same period. This means that for the second quarter, Intel earned over $1 billion, or 18 cents per share, excluding the EU’s $1.45 billion anti-trust fine.
According to Intel CEO Paul Otellini, “Intel’s second-quarter results reflect improving conditions in the PC market segment with our strongest first to second quarter growth since 1988 and a clear expectation for a seasonally stronger second half.”
Analysts speculate this growth could be seen as a welcome development for the semiconductor industry, but also cautioned that PC manufacturers are ordering more processors not to build new machines, but because they have to restock, leaving the chipmaker industry still vulnerable.
Considering all this, Intel has weathered the recession fairly well than most of its competitors in the chip industry. While computers and mobile phones gathered dust on shop shelves, orders for microchips nearly halted. According to the Semiconductor Industry Association, global sales for semiconductors dropped 2.8% last year.
Intel’s sales revival, although encouraging, is still vulnerable to global recessions and supply. There have been six cyclical swings for the industry, the worst happening after the dot com bubble burst spectacularly and reduced sales by 45%.
In general, the semiconductor industry is facing two gigantic issues in order to survive: rising development costs and innovation needs. As the industry remains tied to the trends of the computer industry, the latter’s slowing down is forcing companies like Intel to look for another market.
Analysts at research company Gartner indicates that the PC market is expected a reduced demand of 6% in 2009, pushing Intel to seriously consider the mobile and netbook markets as alternative areas for growth.
Post Author: guest