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Richard Davenport provides differentiated research utilizing supply chain analysis, as well as more traditional methods. He is a former sell-side analyst at Citigroup. In 2005 he founded Connexiti LLC, a market-leading provider of supply chain data, research, and analytics. While at Connexiti,... More
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  • Acer : Huge June; Positive PC Data Point 0 comments
    Jul 8, 2009 10:19 PM | about stocks: AMD, ATHR, AUTH, DELL, HPQ, IDTI, INTC, LSI, LXK, MRVL, MU, NVDA, STX, SYNA, WDC

    EVENT Jun Revs NT$44.187B (US$1.339B); +27.2% M/M, Well Above 6-Yr Avg of +16.5%

    CAUSE

    Desktop/Notebook/Netbook PC Growth; Perhaps Some Market Share Gains

    IMPACT

    Broadly Positive For PC Supply Chain

    ACTION 

    Already Positive On PC Supply Chain (4.9.09)

    SUPPLY CHAIN EVENT TRACKER

    5.6.09 Supplier ONNN guides Q2 revs +7.4% above Street expectations

    5.9.09 Supplier NVDA guides FQ2 revs +30.0% above Street expectations

    5.18.09 Company SMSC guides FQ2 revs +6.9% above Street expectations

    5.19.09 Customer HPQ guides FQ3 revs -1.5% below Street expectations

    5.28.09 Customer DELL reports FQ1 revs -2.5% below Street expectations; no guidance

    5.28.09 Competitor MRVL guides FQ2 revs +5.2% above Street expectations

    6.8.09 Supplier AUO reports May revs +8.1% above seasonal norms

    6.22.09 Industry MRVL guides FQ2 revs +10.0% above Street expectations

    6.25.09 Supplier SMSC guides FQ2 revs +17.3% above Street expectations

    6.24.09 Supplier STX guides FQ4 revs +7.4% above Street expectations

    6.24.09 Supplier STX guides FQ1 revs +6.7% above Street expectations

    7.7.09 Supplier AUO reports Jun revs +11.2% above seasonal norms

    EVENT: HUGE JUNE. Earlier today Acer, the world 3rd largest PC vendor, reported Jun revs of NT$44.187B (US$1.339B. The results were up +27.2% M/M, well above a 6-yr historical avg of +16.5%. The Jun results put Q2 revs at NT$108.436B (US$3.285B); the increase of +14.1% Q/Q is well above a 6-yr avg of +1.0%. As of Q1, notebooks/netbooks comprised 68% of Acer’s revs; desktops 17%; displays 12%; and other 3%.

    CAUSE: PC STRENGTH; POSSIBLE SHARE GAINS.

    Preliminary Jun data from Taiwan PC supply chain companies that have reported thus far is very strong (we’ll have a separate note)

    Recent PC supply chain data have been strong:

    6.25.09: SMSC, with 42% exposure to PCs, guided Aug-Q +17.3% above the Street.

    6.25.09: MU guided DRAM bit growth mid to high teens (as high as any in the past 4 yrs).

    6.24.09: STX raised guidance well above the Street not just for the Jun Q but for the Sep Q as well.

    6.22.09: MRVL (~50% exposure to HDDs) guided FQ2 revs +10% above the Street.

     

    Acer has been gaining share, so we assume some additional share gains have occurred. However, we believe Acer’s strength is more of a rising tide that lifts all ships, for several reasons:

    IMPACT/ACTION: REITERATE LONG POSITION ON PC SUPPLY CHAIN.

     

    We view Acer’s Jun results as continuing this trend of better-than-expected PC supply chain data. Using Connexiti’s software, we identified a positive trend in PC supply chain data back in early April (see SMSC: Positive PC Supply Chain Indicator, 4.9.09). Thus we reiterate our long position on several PC supply chain names, including AMD, ATHR, AUTH, DELL, HPQ, IDTI, INTC, LSI, LXK, MRVL, MU, NVDA, STX, SYNA and WDC. As PCs are one of the biggest drivers of semiconductors, we view this data point as broadly throughout the semiconductor supply chain as well. For more information, see our BizMaps at www.connexiti.com.

     

    Disclosure: No positions

    Themes: PCs, Taiwan Stocks: AMD, ATHR, AUTH, DELL, HPQ, IDTI, INTC, LSI, LXK, MRVL, MU, NVDA, STX, SYNA, WDC
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