Feeds

Inventory cutbacks torpedo VIA's sales forecasts

Structural blip, not lower demand

  • alert
  • submit to reddit

Bridging the IT gap between rising business demands and ageing tools

VIA Technologies tried its best to keep out of the limelight today as it reduced September revenue forecasts to NT$3 billion.

The chipmaker sought to distance itself from Intel, which last week issued a profit warning, citing reduced PC demand in Europe.

The September sales shortfall is normal, VIA says. It's nothing to do with slowing PC demand, it insists. It just so happens that September is the end of the third quarter, and customers are cutting back on inventory to pretty the numbers for their own quarterly financial statements.

You watch, VIA says, revenue growth will pick up again in the booming fourth quarter - and should exceed its August record of NT$3.8 billion. Anyway, revenue of over NT$3 billion for the month isn't bad, it said.

But for August's revenue to have increased by over a third over July's, and then for September to be flat has financial analysts and markets wondering whether VIA is telling the whole story. The plunge in VIA's stock price yesterday was just within the maximum seven percent limit. The stock has lost nearly a fifth of its value in the last 13 trading days.

VIA's motherboard and systems maker customers may well be tidying up their inventories to polish up their third quarter financial statements, analysts are saying. But their reluctance to carry a large inventory has the finance experts asking questions.

"Why do they want to clean up their inventory?" asked Abraham Leu, head of Asian technology at Prudential-Bache. "Because they have built up too much inventory," he said. If demand were normal, motherboard makers wouldn't be bothered about a high inventory. But now, inventory is too high as they can't get more orders, said Leu. "PC demand is slowing down inevitably," he said. ®

S3/VIA integrated chipset hits the streets
Via, Qualcomm threatened by Intel-TSMC deal
Intel slide a little wafer thin

Build a business case: developing custom apps

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Nadella: Apps must run on ALL WINDOWS – on PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
HP and Microsoft prove it again: Big Business Doesn't Create Jobs
SMEs get lip service - what they need is dinner at the Club
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.