Doug Freedman at American Technology Research has issued a call in the PC and memory sector this morning. The firm notes that the March quarter is tracking in-line with normal seasonality for most parts of the technology and hardware supply chain.
Channel checks suggest that Intel (NASDAQ: INTC) server parts are being well-received and selling well into a market absent a competitive part. AmTech also noted that continued upside to dual processor configurations have been cited. Intel may have offset strong high-end server and notebook sales with a slightly more aggressive promotion in retail. As far as Advanced Micro Devices (NYSE: AMD), the ATI data points are tracking positive, in-line with expectations, with AMD chipsets and drivers for ATI cards gaining traction with low-end enthusiasts and more mainstream markets.
Freedman also noted that notebook checks are in-line with expectations and seasonality for the most part. The first half of March DRAM pricing continued to show strength, and AmTech expects a downturn in second-half contract pricing in-line with the recent trend in spot prices and continued pressure on NAND ASPs.
While some channel checks have reported weakening consumer demand, AmTech noted that it cannot say it is outside of normal buying patterns. It also noted that large OEMs have gained against smaller tier two and tier three suppliers.
Freedman notes, "While general sentiment has been negative, not-withstanding this week’s rally, we believe the market normally misinterprets seasonally weak periods as evidence of protracted downturns. We do not see evidence to support this thesis yet with generally healthy channel inventories supporting distributor flexibility and re-order rates."
American Tecnology Research has reiterated its BUY ratings on Intel (NASDAQ: INTC), Advanced Micro Devices (NYSE: AMD) and on Micron Tech (NYSE: MU). It is also maintaining its NEUTRAL ratings on both NVIDIA (NASDAQ: NVDA) and Qimonda AG (NYSE: QI).
Jon C. Ogg
March 13, 2008