Motherboard Malaise Trips Tech Stocks
Tech stocks ended Friday's session in retreat, following a bearish analyst note about plunging demand for PC motherboards.
The Philadelphia Stock Exchange Semiconductor Sector Index closed off about 2% to remain in its six-week trading range.
According to news reports, Goldman Sachs analyst Henry King released a note that Taiwanese makers of PC motherboards have seen a sharp drop in demand in October, leading him to slash his monthly shipping estimate.A motherboard is a printed circuit board on which all of a PC's main chips are attached, from the microprocessor to memory chips and power management circuits. A drop in motherboard demand is bad news for the chipmakers whose products sit on the boards, as well as for PC sales in general, since it signals weak end-market demand for computers. Intel, AMD and Micron were all down at least 3% late Friday. Dell and H-P each slipped more than 1%. National Semiconductor (NSM) and International Rectifier (IRF), both of which make components for PCs, slid 4.9% and 2.9%, respectively. The PC market is already under pressure, owing to the delay of Microsoft's (MSFT) new Vista operating system, the high PC saturation of the U.S. market and an increasing array of electronic gadgets fighting for consumers' dollars.
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