Lenovo Says World Chip Scarcity to Persist as Revenue Jumps


China’s Lenovo, the world’s greatest maker of private computer systems, mentioned {that a} international chip scarcity would persist into the primary half of subsequent 12 months because it reported a 65 p.c rise in second-quarter revenue on Thursday.

The corporate mentioned it was in a position to outgrow the market by securing extra provide of parts than its friends, however acknowledged {that a} dearth of chips was “inflicting delays so as fulfilment and vital back-log orders throughout PCs, smartphones, and servers.”

CEO and Chairman Yang Yuanqing advised Reuters in an interview that his earlier prediction that the scarcity will stay unresolved at the least till the primary half of 2022 remained unchanged.

“The scarcity is pushed by sturdy demand, notably within the IT sector and within the electrical car sector,” he mentioned.

Shares within the firm fell as a lot as 5 p.c after its outcomes which Guotai Junan analyst Gin Yu mentioned mirrored market issues over how the semiconductor crunch, which has impacted items from cars to house home equipment, was affecting worldwide PC shipments.

Analysis consultancy Gartner mentioned final month that development in worldwide PC shipments slowed within the September quarter as easing anti-virus measures prompted client and academic spending to maneuver away from PCs to different priorities and chip shortages constrained laptop computer shipments.

Lenovo retained the title of largest worldwide PC vendor by shipments, although its development slowed after 5 consecutive quarters of double-digit development, Gartner mentioned. Within the third quarter, Lenovo’s international market share grew 1.8 p.c to 23.7 p.c.

Yang mentioned Lenovo has been helped by its distinctive hybrid provide chain mannequin, which sources parts externally and from in-house manufacturing, and whereas it had seen a dip in instructional PC demand, business demand remained sturdy.

Earlier on Thursday the corporate reported revenue for the quarter ended September 30 attributable to fairness holders jumped to $512 million (roughly Rs. 3,814 crore) versus $310 million (roughly Rs. 2,310 crore) in the identical interval a 12 months earlier.

Income rose 23 p.c to $17.9 billion (roughly Rs. 1,33,395 crore), barely above a mean estimate of $17.3 billion (roughly Rs. 1,28,906 crore) from 9 analysts, in accordance with Refinitiv information.

Regardless of worries about chip provides, Lenovo’s shares have risen greater than 70 p.c during the last 12 months, however buyers had been rattled final month when the corporate abruptly withdrew its CNY 10 billion (roughly Rs. 11,642 crore) share itemizing in Shanghai.

Yang mentioned elements akin to market circumstances and the itemizing course of had been behind the choice, and mentioned that the transfer wouldn’t damage its enterprise.

© Thomson Reuters 2021


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