Vista adoption will not boost PC sales, predicts TSMC

Microsoft's new Windows Vista OS won't boost PC sales very much this year because OSs usually face slow, gradual adoption, the CEO of TSMC said.

Microsoft's new Windows Vista OS won't boost PC sales very much this year because operating systems usually face slow, gradual adoption, the head of Taiwan Semiconductor Manufacturing Co. said Thursday.

TSMC, the world's largest contract chip maker, believes PC sales growth in 2007 will be similar to last year, despite the hype surrounding the launch of Vista. The company is considered an IT industry bellwether due to the wide variety of chips it manufactures. TSMC also does its own market research in order to decide how much it should spend on new factories.

Enterprise users are normally slower to adopt new OSs, said Rick Tsai, president and chief executive officer of TSMC. His company will be no exception, as it will not be an early Vista adopter, he said. Consumers are the users more likely to buy a new OS like Vista in the early days after its launch, he added.

The Vista issue was raised after TSMC executives said the global chip industry is suffering amid a glut in mobile phone and PC chips. TSMC reported its worst quarterly net profit in a year and a half on Thursday, as the chip glut worsened and orders fell.

The current quarter, January to March, will be even worse, TSMC executives said, but it will mark the bottom of the chip industry downturn.

TSMC's fourth quarter net profit dropped 18 percent compared to the same time a year earlier, to NT$27.91 billion (AUD$1.1 billion as of Dec. 31, the last day of the period reported.) It was the chip maker's worst performance since the third quarter of 2005, when its net profit hit NT$24.49 billion.

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Dan Nystedt

IDG News Service
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