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Wednesday, October 25, 2006
PC makers hit by Vista-triggered Component Shortage

Supply shortage of PC components has seriously hit PC makers since mid-October, and they are scrambling for crucial components including microprocessors, dynamic random access memory (DRAM) chips, chipsets, and lithium batteries.

Industry watchers blame Vista, Microsoft's next-generation operating system (OS), for the supply shortage.

The shortage even pushed Acer Chairman C.T. Wang to show up at American suppliers to secure the supplies. Acer is currently the world's No.4 PC supplier.

Taiwan's top five notebook-computer suppliers-Quanta Computer, Compal Electronics, Wistron, Inventec and Asustek Computer-are competing to grab DRAM chips to fill their needs as Vista requires minimum memory capacity of 915 megabyte, compared to the standard 512 Mb for current Windows XP OS.

Executives of DRAM chipmaker Nanya Technology Corp. pointed out demand for the memory chips has exceeded the supply by 20-50 percent. They expected the tight demand to last through this quarter.

Although average price of a 512Mb DDRII DRAM module has surged to US$50, industry watchers do not expect the price to soar further considering the price has crossed the recent peak of US$48.

Intel executives said they have felt supply shortage of the company's chipsets and microprocessors and expected the problem to be eased sometime this quarter. Some insiders pointed out Intel helped complicate the shortage from the view that the chipmaker rolled out new products too frequently this year, leading to their competition for new products.

Some institutional investors expected the supply shortage to check the growth of PC shipments worldwide this quarter.

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