Easing chipset woes should help PC market

Easing chipset woes should help PC market

A shortage of computer chipsets that has taken the blame for everything from slowing the momentum of brisk global PC sales to delaying the adoption of new memory chip technologies should be nearly over, according to component makers and analysts. This will ensure the vital part does not hurt PC sales during the important holiday buying season.

The global PC industry ran into a shortage of computer chipsets in the middle of the year as users snapped up new PCs at an unexpectedly brisk pace.

Component makers complain that without the chipset shortfall, users would have bought even more computers. But now the supply of chipsets is rising, just as the traditional computer buying season wanes, and that should mean shortages of the vital PC part are nearly over.

"Chipset makers have been able to increase production, so that should help take care of the problem.

"And since PC demand is quite seasonal, demand for chipsets this year will gradually decrease in November," a semiconductor analyst at SinoPac Securities, James Huang, said.

A number of chipset suppliers said they were able to increase output, which should help meet demand even if consumers continue to buy PCs at a zippy pace throughout November.

Between July and the end of September, worldwide PC shipments increased by more than 17 per cent compared to the same time last year, according to IDC, a much faster pace than the 13 per cent growth rate it had expected.


US chip giant, Intel, which has taken the brunt of industry ire over the chipset shortage, said a dearth of chipsets for low-end PCs could remain a problem through December, but that it has met demand for chipsets used in notebook PCs and servers during the past few months. The company believes the chipset shortage may not abate until early next year, according to company spokesperson, Barbara Grimes.

In August, the world's largest chipmaker said stronger-than-expected PC demand had forced it to reduce production of certain kinds of chipsets because its factories were already full of orders for higher-margin products. The manufacturer has been battling to keep up with chipset demand for much of the year.

To make up for Intel's shortfall, Taiwanese chipset suppliers have been increasing output.

"We were able to plan our production, so the fourth quarter shortage shouldn't be as serious as the third quarter," a representative of Taiwanese chipset supplier, Silicon Integrated Systems, Jessie Lee, said.

It takes about three months to finish a computer chipset, so companies have to carefully plan production schedules. They don't want to be left with a huge inventory of unsold chipsets, but they also want to sell as many as possible.

The company thought the chipset shortage had been a drag on PC sales, and expected strong demand for PCs to continue past the traditional peak month of October, Lee said.

Via Technologies, another Taiwanese chipset supplier, would increase chipset output by up to 10 per cent in the current quarter compared to the third quarter company spokesperson, Amy Liao, said.

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