Analyst: PC demand still sluggish - Solid State Technology
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Analyst: PC demand still sluggish

April 4, 2011 - Top notebook ODMs are indicating that their business is softer than expected for both 1Q11 and 2Q11, with a key chip technology not stimulating end-demand as had been expected, according to one analyst.

1Q notebook builds from six top ODMs are seen down -11% vs. 4Q10 (a half-tick worse than projected), and 2Q build expectations are being halved to 7% Q/Q, notes FBR Research analyst Craig Berger. Part of the problem is that Intel's Sandy Bridge products "are not stimulating as much end demand as expected," he writes in a research note. Though there's still a chance that notebook demand and builds could improve by June, "it is difficult to get excited about PC unit growth," he says.

Berger projects Intel's client CPU unit shipments to fall -4% in 1Q11, a bit better than notebook builds, but the company's "many moving parts" (e.g. Infineon's wireless acquisition and McAfee revenues) "make it difficult to compare PC build trends with likely financial results." For AMD, Intel's chipset bug and recall will likely help sales in the near-term. For 2Q11, he sees PC sluggishness dragging on both companies, with AMD's 32nm production ramp as an added factor for the company.