Y2K will lower PC shipments in fourth quarter

By Staff -- Purchasing, 6/17/1999

Expect PC sales to be strong until the fourth quarter. Then all bets are off. Reason: Y2K issues.

Cahners In-Stat says while Y2K scenarios are hard to predict, research indicates that a "corporate IT lockdown" will occur in the fourth quarter effectively limiting PC installations as companies take a wait-and-see attitude about Y2K concerns.

Cahners In-Stat says PC shipments will rise 12.2% in 1999. Third-quarter shipments should rise 17% year to year, but then fall to 7.6% in the fourth quarter.

Slow fourth-quarter PC shipments will impact component suppliers. Example: PC shipments account for about 60% of dram bit shipments. A PC slowdown will mean less dram consumption, which should mean dram prices may fall again toward the end of the year. That's obviously good news for buyers, but the dram industry has been hammered by oversupply and plummeting prices for the past three years, which has hampered investment in new facilities and equipment.

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