Taiwan Semiconductor Manufacturing, one of the largest chipmakers in the world, reported this week that sales for October were the highest on record at about $216 million.
"Despite the negative impact of the earthquake...the company's wafer shipment for October 1999 reached a new record high at 169,000 8-inch equivalent wafers, and the company's sales for October 1999 also grew to a new record," TSMC said in a statement.
"It was mainly due to the faster-than-expected recovery and the capacity expansion," the company added.
TSMC said sales for October showed an 18 percent increase sequentially over September 1999 and a jump of 71 percent on a year-to-year basis. Acer, which supplies computers and components to a number of PC makers worldwide, also recorded strong sales in October.
But the PC aftershocks are likely not finished. Dell Computer reports quarterly earnings after the market closes today, and last month it lowered earnings expectations because of a surge in memory prices. The hike has added nearly $75 to the manufacturing cost of roughly one-third of all Dell computers, the company said at the time. (See related story.) Also, some analysts are still worried about possible PC supply problems later this month and in December.
But others have a more sanguine outlook about the status of Taiwan-based manufacturers now compared to five weeks ago. "We're fairly close [to recovery,]" said Ashok Kumar, an analyst at U.S. Bancorp Piper Jaffray. Kumar said most of the supply concerns have been centered on graphics chips. But that problem has been offset by the three weeks of inventory that PC makers dipped into; it was also alleviated more than expected by Intel's success with its 810 and 810E chipsets, which integrate graphics.
"Initially PC makers were neutral to negative [about the 810 and 810E] but now they think it hits the sweet spot in price performance," said Kumar. In the past, chipsets did not come with integrated graphics. This function came on a discrete chip supplied by a host of graphics chipmakers including ATI Technologies and Nvidia. Though these companies continue to supply PC makers in considerable volume, Intel is stealing some of their market at the low end by virtue of being the largest chipset maker in the world.
Memory chip prices have also begun to stabilize. NECX, an online distributor, shows prices of DRAM chips either stabilizing or falling. This is in stark contrast to late September when prices jumped as much as $40 in some cases. At that time, ATI indicated it was forced to raise the price of graphics memory used in its products. Dell also said in mid-October that a surge in memory prices may have an impact on earnings.
But a spokesperson for Micron, one of the world's largest memory chipmakers, said that spot prices are way down from their highs of six weeks ago and that contract prices--the prices that large PC makers often pay--have been stable for the last three weeks.
Japanese companies are also seeing a stable supply of PCs and most components from Taiwan, according to reports. Taiwan-based suppliers to Fujitsu and other Japanese PC makers have reached pre-earthquake levels, according to Japan's Nihon Keizai Shimbun, a major business daily.
The report cautioned, however, that chips for CD-ROM drives and some other basic components may continue to be in short supply. Mitac, a major supplier of PCs to Hewlett-Packard, has also cautioned about continuing supply problems.