Piper Jaffray chip analyst Gus Richard today writes that while chips are about to experience a “bounce” in inventories later this year, 2012 is setting up as a difficult year for Intel (INTC) and the industry as a whole.
The electronics supply chain’s reluctance to build inventory this summer, amid U.S. budget issues and the sovereign debt crisis will likely reverse itself in Q4, Richard writes, as the supply chain restocks.
However, 2012 will be tricky, as the strength of different products diverge. One the one hand, “We expect smart phones, tablets, wireless and cloud infrastructure to remain strong.”
But ” whereas classic consumer demand is expected to remain weak,” and Microsoft’s (MSFT) time frame for upgrading Windows to the new Windows 8 will cause 2012 to be a lost year:
“PC will be weak as the corporate refresh cycle slows and the Wintel Tablet based on [Intel's next microprocessor revamp] Haswell and Window8 does not launch until CY13.”
2012 is thus a “transition” year, writes Richard, as both Microsoft and Intel work mightily to “turn a tanker,” meaning a PC market prey to tablet cannibalization.
Windows 8 is optimized for smartphones and tablets and is expected to launch in late CY12�Dec and Intel is working on the Haswell processor due out in early CY13. Haswell is expected to cut the thermal design point to 15 watts down from 35 watts. This will enable it to run on the tablet form factor. We believe that Haswell, a mainstream processor, is Intel�s answer to cannibalization of the PC market by tablets.
Richard has a Neutral rating on Intel shares and a $21 price target.
Intel shares today are down 12 cents, or 0.6%, at $21.85.
No comments:
Post a Comment