Microchip Makers Posting Profits Despite Weak Consumer Demand
October 15 2010 - 12:35PM
Marketwired
After a poor start to 2009 prompted companies to reduce investment
and cut production capabilities, surging microchip demand in 2010
has led to supply shortages as chip makers struggle to fill orders.
Although performance in this industry is expected to be strong,
inability to immediately increase production may limit the upside
companies see in this industry as the microchip manufacturers are
already operating at 96% of capacity. Even with investment in the
semiconductor industry expected to increase by 84% this year, any
increases in microchip production won't be realized for many
months. The Bedford Report examines the outlook for companies in
the Semiconductor - Broad Line Industry and provides research
reports on Advanced Micro Devices, Inc. (NYSE: AMD) and Texas
Instruments, Inc. (NYSE: TXN). Access to the full company reports
can be found at:
www.bedfordreport.com/2010-10-AMD
www.bedfordreport.com/2010-10-TXN
Shares of AMD rose sharply in after hours trading yesterday
after the company reported third quarter earnings of 15 cents a
share not counting losses related to its factory spinoff -- well
ahead of consensus analyst estimates forecasting earnings in the
neighborhood of 6 cents a share. AMD has been driving growth over
the last year by spinning off factories it couldn't afford into a
separate entity called GlobalFoundries. This venture accounted for
a $186 million non-cash loss.
The Bedford Report releases regular market updates on the
Semiconductor - Broad Line Industry so investors can stay ahead of
the crowd and make the best investment decisions to maximize their
returns. Take a few minutes to register with us for free at
www.bedfordreport.com and get exclusive access to our numerous
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AMD's profit improved despite what the company's CEO Dirk Meyer
called, "weaker than expected consumer demand" in the US and
Europe. Analysts had been forecasting negative long term effects of
the iPad on the PC industry. According to market research firms
Gartner and IDC's estimates, worldwide PC shipments grew 7.6
percent during the quarter, well below its anticipated projection
of 12.7 percent.
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