China’s Lenovo says world chip scarcity to persist as revenue jumps

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A Lenovo emblem is seen on the laptop in Kiev, Ukraine April 21, 2016. REUTERS/Gleb Garanich

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SHANGHAI, Nov 4 (Reuters) – China’s Lenovo Group (0992.HK), the world’s largest maker of private computer systems, stated {that a} world chip scarcity would persist into the primary half of subsequent 12 months because it reported a 65% rise in second-quarter revenue on Thursday.

The corporate stated it was capable of outgrow the market by securing extra provide of elements than its friends, however acknowledged {that a} dearth of chips was “inflicting delays so as fulfilment and important 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 not less than till the primary half of 2022 remained unchanged.

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

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

Analysis consultancy Gartner saidlast month that progress in worldwide PC shipments slowed within the September quarter as easing anti-virus measures prompted shopper 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 progress slowed after 5 consecutive quarters of double-digit progress, Gartner stated. Within the third quarter, Lenovo’s world market share grew 1.8% to 23.7%.

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

Earlier on Thursday the corporate reported revenue for the quarter ended Sept. 30 attributable to fairness holders jumped to $512 million versus $310 million in the identical interval a 12 months earlier.

Income rose 23% to $17.9 billion, barely above a mean estimate of $17.3 billion from 9 analysts, in keeping with Refinitiv information.

Regardless of worries about chip provides, Lenovo’s shares have risen greater than 70% during the last 12 months, however buyers had been rattled final month when the corporate abruptly withdrew its 10 billion yuan ($1.56 billion) share itemizing in Shanghai.

Yang stated elements corresponding to market situations and the itemizing course of had been behind the choice, and stated that the transfer wouldn’t harm its enterprise. learn extra

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Reporting by Brenda Goh; Modifying by Kim Coghill

Our Requirements: The Thomson Reuters Belief Ideas.


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