By Ian Sherr

(Reuters) – Advanced Micro Devices Inc may make some of its largest inroads into the fast-growing laptop computer market thanks to a new generation of power-efficient chips to be unveiled next week.

People familiar with the matter who work for AMD said the company’s latest microprocessors are expected to be included in 109 mainstream laptop models in the coming months, the company’s best showing during the crucial back-to-school sales season. Last year, AMD’s chips were available in 40 laptop models.

“This is the first time we’ve seen this much attention to our notebooks,” the source said, referencing the company’s laptop chips.

And while shifts in market share are yet to be seen, “typically more design wins dictates more sales,” the source said, adding the company’s offerings are growing steadily across the major PC manufacturers.

The perennial second-fiddle to market giant Intel Corp has struggled to gain market share within laptop PCs, which have outpaced the growth of desktop PCs in recent years.

AMD’s stock has underperformed Intel since the beginning of the year, losing 14.57 percent of its value, where Intel has gained 5.44 percent.

However, AMD’s stock more than doubled off its 52-week low of $3.22 to close Thursday’s session at $8.27 on the New York Stock Exchange.

GROWTH AND RECOGNITION

Early signs are that the new range of chips to be unveiled next week are getting positive responses from top PC makers due to AMD’s attempts to simplify its numerous offerings under its new “Vision” brand, as well as improved battery life and performance across the line, according to one of the sources.

In the first quarter of 2010, AMD represented 12.1 percent of worldwide mobile chip sales, according to IDC. Intel’s market share was 87.8 percent.

While AMD has been slowly gaining market share over the past year for both desktops and notebooks, its strength slipped in the lucrative server market, ending 2009 with 10.1 percent share compared to 13.4 percent in 2008.

Now, AMD says it’s focusing on the consumer segment, which is expected to fuel PC growth.

Latest figures from industry watcher iSuppli peg notebook PC shipments growing 25.5 percent in 2010, to 209.5 million units from last year’s 166.9 million.

The sources also told Reuters that all of the microprocessors in the forthcoming laptops will be matched with AMD’s chipsets — collections of chips that connect the microprocessing brain to other parts of the computer.

That means AMD can collect more revenue for each laptop sold than it can when its microprocessors are paired with chipsets from other companies like Nvidia Corp.

The PC makers expected to feature AMD’s new chips as early as June include Hewlett-Packard Co, Lenovo, Acer Inc, and Dell Inc, the sources said.

(Reporting by Ian Sherr; editing by Carol Bishopric)

(Originally published May 6, 2010 on the wire at Reuters News, here.)

By Ian Sherr

SAN FRANCISCO (Reuters) – To get accurate projections for Intel Corp, Wedbush Morgan analyst Patrick Wang often finds himself hopping on a plane to Asia.

Wang — who normally crafts complex mathematical models and pores over financial statements — finds, in Intel’s case, it helps to use his fluent Chinese to gather information directly from its customers: top computer manufacturers in the Orient.

“They’re just such a large semiconductor company and to get color in terms of the overall scale, you need that,” he said.

Wang and many other analysts’ predicament may underscore why the world’s top chip maker has beaten expectations in six of the last eight quarters. More than 80 percent of its sales are abroad. Analysts estimate over half its revenue comes from less transparent markets such as China, Africa and India.

Many analysts rely on “channel checks” — surveys of vendors and distributors to gauge supply and demand — but Intel’s case is further complicated by the preponderance of “white-box” manufacturers in those emerging markets: local mass producers of unbranded computers.

Unlike more developed markets such as North America and Europe, where large computer manufacturers release regular sales numbers, many Asian, African and South American countries are dominated by smaller local players.

Intel estimates white-box outfits buy 25 percent to 30 percent of all the chips it sells each quarter.

On April 13, Intel is expected to post $9.80 billion in revenue, and earnings of roughly 37 cents per share, excluding items, in the first quarter of 2010, according to Thomson Reuters I/B/E/S.

“There are countries that analysts tend to overlook because you only have a finite amount of time,” said Real World Technologies analyst David Kanter. “It’s hard to get information there because you’re not going to go to Brazil to talk to a bunch of white-box vendors.”

Yet that’s exactly what many, like Wang, have to do.

RISING DEMAND, LOWER CLARITY

According to Thomson Reuters Starmine, an earnings surprise is likely in the first quarter. Starmine’s SmartEstimate, which places more weight on recent forecasts by top-rated analysts, predicts Intel will post earnings per share about 1 percent above the Street’s average projection.

Demand is rising for computers as more of the world comes online. But many of the Internet’s newest entrants are in locations remote enough that larger manufacturers haven’t yet established a presence, so their market is instead flooded with small generic manufacturers — the veritable black hole of sales into which analysts rarely see.

“It’s so diverse and there are so many different channel players in all different segments in so many different countries, and that’s what makes it complicated to put a sticker on,” admitted Maurits Tichelman, Intel’s director of channel sales.

Markets tend to become easier to read as the industry develops. Insiders at both Intel and Advanced Micro Devices Inc say consumers in developing markets tend to prefer white-box computers, but as their quality of life improves, so, too, does their hunger for portable devices.

Laptops tend to be the domain of major brands, so visibility into sales channels typically improve. Companies like Hewlett-Packard Co, Acer Inc, Toshiba Corp, Dell Inc and Apple Inc all report data that help analysts peer into Intel’s sales volumes.

But if multinationals don’t — or can’t — immediately move in, dominant local players rise instead. After all, Intel’s Tichelman said, Lenovo Group started as a local Intel partner in China; now it’s the world’s No. 4 computer maker.

IDC analyst Shane Rau said the sheer size of the Chinese market, and the country’s own efforts to build as many computer parts as possible within its borders, is leaving another opportunity for surprise.

IDC employs dozens of analysts on the ground, providing first-hand knowledge of the market. But if demand were to surge or drop abruptly, analysts could still miss it, he said.

“There are so many little channel players out there that it’s not entirely clear where all the processors are going.”

Hence Wang’s willingness to cross half the globe from his base in New York to Shanghai.

On a chilly November day in 2009, the 29-year-old sat in a taxi in bumper-to-bumper traffic, preparing for a meeting with product managers for several distributors and, of course, an appointment with Intel.

But even that may not be enough.

“There’s no way to get a good cross section of how those sales are doing,” he said. “You’ll never get a full picture of things.”

(Editing by Edwin Chan and Richard Chang)

(Originally published Sunday, March 28 on the wire at Reuters News, here.)

By Ian Sherr

SAN FRANCISCO (Reuters) – ANALYSIS – When Apple Inc unveiled its iPad last month, one crucial detail almost got drowned out in the hoopla: the new tablet computer will be powered by an in-house chip called the A4.

While Apple likely will not market the chip publicly, analysts say the new processor underscores how rival chip designs may eventually win out over Intel Corp’s designs in the emergent hot category of mobile devices like smartphones and tablets.

Intel says the first smartphones using its chips go on sale by 2010′s second half, as it tries to stake out a corner in the wireless market and replicate what it did for the formerly red-hot netbook category it now almost completely dominates.

But analysts point to an uphill battle against Nvidia Corp, Marvell and Qualcomm Inc, already making headway with cheaper, low-power processors based on designs by ARM Holdings PLC.

“They (Intel) don’t have a track record in delivering these types of chips,” said Wedbush Morgan analyst Patrick Wang. “They haven’t been successful in the past, and they’re trying to get in.”

Not much is known of the A4 — the brainchild of Apple design teams including recently acquired PA Semi — except that it gives the iPad a long battery life and is considered comparable to rival processors in both speed and performance.

That Apple went its own way illustrates how specialized chip design may be more suitable for the burgeoning mobile market than Intel’s do-everything approach.

The difficulty, analysts say, is Intel keeps trying to leverage its x86 technology, on which the more powerful processors that drive eight out of 10 personal computers worldwide is based.

“If you look at the stuff Intel’s put out there at previous press events and developer forums, you see mobile Internet devices that are kind of clunky, really thick, low-battery life type of devices,” Wang said. “They’ve been worried.”

Intel-based tablet laptops have been sold without huge success for nearly a decade. Apple uses Intel chips in its Macintosh personal computers and servers.

A NEW FRONTIER

Since 2007, Intel has been making a strong push into mobile devices with processors designed specifically for wireless products like netbook PCs and handheld Internet gadgets. Its Atom mobile chip began selling in 2008, and has taken the low-cost, no-frills netbook market by storm, powering tiny computers just enough to run Microsoft Corp’s Windows system to check email, surf the Web, and create documents.

But with analysts predicting slowing netbook sales growth, Intel wants to convince device makers that its chips are the best bet for the new breed of handheld gadgets.

And there is a reason: at an investor meeting in May, Intel Chief Executive Paul Otellini said the smartphone chip market and the low-cost netbook chip market each will amount to $10 billion in 2011.

To date, Intel has sold just shy of 55 million chips for netbooks and other mobile devices. About 3 million were targeted at handheld Internet products, although Mercury Research analyst Dean McCarron said many of them most likely ended up in low-end netbooks instead.

Now Apple’s iPad is expected to cement consumer demand for a new class of tablet-style computers and e-readers. IDC analyst Bob O’Donnell said his firm predicted Apple will sell 3 million to 4 million iPads this year compared to an estimated 35 million netbooks and 165 million notebooks expected to be sold in 2010.

But sales of mobile Internet gadgets like tablets are expected to leap several-fold over the course of coming years — an emerging battleground for chipmakers.

Nvidia recently became popular for this new generation of mobile devices with its Tegra platform, which offers graphics married to a processing brain based on designs licensed from ARM. Nvidia expects its mobile-focused platform will pull in at least $200 million in revenue in 2010, and to represent as much as half the company’s revenue in a few years. In fiscal 2009 the company had overall revenue of $3.45 billion.

But just as Apple shunned Intel for the iPad, most tablet and smartphone manufacturers have chosen to build products containing ARM-based products.

“For Intel, there’s an implication that there’s a lot of the computing world you don’t need an x86 for,” said Auriga analyst Daniel Berenbaum.

Instead of relying on Intel’s trademark power, performance, and multi-tasking technologies, he said, most smartphones and mobile devices marketed in the last year have primarily been designed around simple tasks such as watching movies, listening to music, surfing the Web, or flipping through photos — all without draining too much battery power.

That includes Apple, whose self-designed A4 is rumored to be included in the next iPhone, expected this summer.

“If it’s a reminder that Intel is not ready for this kind of prime time, it is a sign that ARM is upscaling,” said IDC analyst Shane Rau. “It’s a sign that the ARM ecosystem is executing.”

(Reporting by Ian Sherr; Editing by Edwin Chan, Phil Berlowitz)

(Originally published February 3, 2010 on the wire at Reuters News, here.)

By Ian Sherr

SAN FRANCISCO (Reuters) – Stellar results from Intel Corp could signal brighter tech earnings results in coming weeks, but analysts warn stocks themselves may be stuck in a short-term correction.

Intel shares fell more than 3 percent even after analysts from Credit Suisse, Raymond James and JMP Securities, among others, raised their price targets on the stock. JMP Securities and Thinkequity raised their ratings to “outperform” and “buy” respectively.

The broader market was down on Friday as losses from JP Morgan Chase & Co helped drag the tech-heavy Nasdaq Composite down 1.24 percent.

Wedbush Morgan analyst Patrick Wang expected a short-term correction for Intel and many other semiconductor stocks as Wall Street locks in profits after a solid fourth-quarter showing from the world’s largest chipmaker.

“Buy on the rumor, sell on the news,” he said, adding that semiconductor stocks have had a good run when put in the perspective of downgrades from both Morgan Stanley and Merrill Lynch before Intel reported stellar earnings.

“There’s no rhyme or reason behind the weakness here except that expectations are up and people are taking profits,” Wang said.

(more…)

SAN FRANCISCO, Jan 12 (Reuters) – GlobalFoundries plans to merge its operations with recently acquired Chartered Semiconductor, creating a single contract chipmaker with more than $2 billion of revenue to take on market leaders TSMC and UMC.

GlobalFoundries, a joint venture of Advanced Micro Devices Inc and Abu Dhabi-backed Advanced Technology Investment Co, is already beginning to work with suppliers and partners as one company, GlobalFoundries Chief Executive Doug Grose told Reuters in an interview.

(more…)

By Ian Sherr

SAN FRANCISCO, Dec 4 (Reuters) – Graphics microchip maker Nvidia Corp is a company in transition.

The Santa Clara-based company halted development for one of its largest units in October, raising questions about whether the unit’s product sales would slowly tail off or sales would drop off a cliff.

And, if they did, could the company’s products in new market segments gain enough traction to make up the difference?

(more…)

MILPITAS, Calif. (Reuters) – The rapid proliferation of multimedia and Web-ready consumer devices such as smartphones is underpinning a gradual uptick in corporate spending and spurring growth for specialty chipmakers, the top executive at industry player LSI Corp said.

The company, which competes with the likes of Marvell Technology Group Ltd to make chips for computer servers and storage devices, wants to continue to hitch a ride on that wave of consumer devices by providing chips for network and data infrastructure, said Chief Executive Abhi Talwalkar.

“There’s richer content flowing through networks,” he said in an interview at LSI’s offices in Silicon Valley.

“Just the push of richer PDAs (handheld devices), and the growing mix of PDAs as a percentage of overall mobile subscribers — that in itself is driving tremendous requirements,” he added, referring to both network infrastructure and data storage for Internet-centric devices.

(more…)

By Ian Sherr

SANTA CLARA, California (Reuters) – Intel Corp’s (INTC.O) chief financial officer said the chipmaker is on track to meet its fourth-quarter outlook and said a recovery in corporate spending on PCs could happen in the next 18 months.

“I think the ingredients are being put in place that will lead to a PC refresh cycle in large enterprises,” Stacy Smith told Reuters on Friday, adding that when the buying starts, it tends to include a lot of demand.

“The question is: is that the second half of 2010, is it 2011?” Smith, 47, said in an interview at Intel’s headquarters in the heart of Silicon Valley. “I don’t think anybody can tell you they know the answer to that question.”

(more…)

By Ian Sherr

SAN FRANCISCO (Reuters) – The U.S. economy may have begun to recover in 2009, but holiday office parties are sinking even further into the dumps.

Fewer companies plan to break out the bubbly this season than in 2008, at the height of the global financial crisis, according to a survey from Challenger, Gray & Christmas Inc.

Only 62 percent of about 100 companies that responded to the survey were planning holiday parties this year, down from 77 percent a year ago and 90 percent in 2007, as recession-era cuts extended from benefits and profit-sharing to Santa hats and disc jockeys.

“For companies that have recently announced layoffs or other significant cost-cutting measures, such as wage freezes, it would be difficult to justify, let alone get in the mood for a holiday party,” said John Challenger, the firm’s chief executive officer.

(more…)

By Ian Sherr

SAN FRANCISCO (Reuters) – Price cuts helped Sony Corp’s Playstation 3 become the top-selling video game console for the first time since its release, as U.S. sales of video game gear and software in the United States rose a modest 1 percent in September from a year ago, a research group said on Monday.

The PlayStation 3 dethroned long-running champ Nintendo and its Wii console to take the top spot, according to NPD. Microsoft’s Xbox 360 came in third.

“If they didn’t have the price cut, it wouldn’t have happened,” said Wedbush Morgan analyst Edward Woo, noting the PS3′s $200 in price cuts over the past two years.

(more…)