Some Chip Makers Set To See Boost From Windows 7 Release
October 15 2009 - 3:17PM
Dow Jones News
A successful launch of Microsoft Corp.'s (MSFT) new Windows 7
operating system will likely lift all chip makers if consumers and
businesses are spurred to buy new computers - but some could see an
especially strong boost.
In addition to Intel Corp. (INTC) and Advanced Micro Devices
Inc. (AMD) - makers of the main chips running PCs - memory makers
would benefit from a strong launch of the new operating system. And
companies such as Synaptics Inc. (SYNA) that provide touchscreen
features are positioned to benefit as well.
Microsoft's long-awaited Windows 7 is scheduled to be unveiled
Oct. 22. The launch has been touted as an important driver of
demand for PCs as the tech sector looks to recover from the
recession, with consumers and businesses expected to grab computers
with the new software after skipping an upgrade to Windows
Vista.
Intel and AMD, along with graphics chip-maker Nvidia Corp.
(NVDA), would likely see increased revenue from any pickup on PC
spending spurred by Windows 7. Especially compelling is the
prospect that corporate PC purchases, largely absent from the early
stages of the tech market recovery, will re-enter the market in
2010 as IT pros become acquainted with the new software.
"I think there's a lot of excitement about Win 7, but again, the
trend we saw for the bulk of this year, including the current
quarter, third quarter, was driven by consumer sales particularly
in notebooks and netbooks," Intel Chief Executive Paul Otellini
said in a recent conference call.
"The corporate side is a bit different ... I would expect that
that evaluation process will happen over the rest of this year, and
we'll start seeing corporate purchases on a refresh basis begin in
2010," he said.
Meanwhile, features of Windows 7, particularly those that allow
for greater use of computer memory and enable more touch-screen
features, have the potential to spur demand for memory chip firms,
such as Micron Technology Inc. (MU) or Samsung Electronics Co.
(005930.SE) and touch-leader Synaptics
While Windows 7 requires less memory than its forerunner Vista,
the new software doesn't cap the amount of memory that can be used.
Some corporate users and creative pros may want the additional
bytes for running sophisticated programs, increasing overall
demand.
Lazard Capital analyst Daniel Amir added that the touch features
in Windows, which include a full menu of multitouch commands like
those used on Apple Inc.'s (AAPL) iPhone, should create increased
demand for computers capable of reacting to fingertips as well as
mouse clicks.
"With the software upgrades in Windows 7, touch will play an
even more prominent role in human-machine interaction," he said in
a client note.
Synaptics controls 65% of the PC touchpad market, according to
Amir, and plans to have screens large enough for notebooks by the
first half of 2010.
He said it wouldn't be surprising to see Synaptics "become a
major player in the larger screen market over the next year."
-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155;
jerry.dicolo@dowjones.com