VIA: Sales are 30% Down, Earnings per Share Fall 95%!

[BD231]

Check this out :Q:

Link

VIA Technologies has announced their second quarter financial results that appear to be even worse than the most pessimistic analysts could have expected. Although the reasons of this Taipei-based chipset-maker`s failures are fairly and squarely clear, their end-results are astonishing.

VIA`s net sales decreased about 30% to NT$14.4 billion (US$428 millon) during the first half of the year and earnings for the second quarter plummeted 95% to NT$46 million (US$1.4 million) compared to the same periods last year. Revenue for the second quarter was NT$5.2 billion (US$152.9 million), far below analysts` estimates. The EPS (Earnings Per Share) reached NT$0.05, whereas a year ago this value was NT$1.08.

Seeing continuous sales slump in the first two quarters and comparatively weak first half of the third quarter, Ted Lee, vice president of world-wide sales and marketing at VIA, decided to retire from his current high post, not leaving the company, though.

This year has been quite tough for VIA so far. As the company still has not secured their license on Pentium 4 system bus, a lot of their partners decided not to use appropriate core-logic products from this chipset-developer due to the pressure from Intel. At this point VIA had to offer extremely attractive prices to their remaining partners and such strategy causes their gross-margins to slide down further. Moreover, this year Intel and SiS have become very aggressive, providing more and more advanced products sometimes even cheaper than VIA. Due to broad product families from these two companies, their market share has risen gradually, meanwhile VIA`s market presence continues to decrease both among Socket 478 and Socket A platforms.

Meanwhile, VIA`s CEO, Wen Chi Chen, told during the recent conference-call that the company is still confident in their strategy and is not going to license Pentium 4 system bus. He added that his company did not need Pentium 4 license, but if Intel wanted, the latter could try to convince VIA to secure it. The Taipei-based core-logic developer now hopes to enhance its profitability with its diversification strategy.

 

[microAmp]

That's gotta hurt! 95% drop....

 

[BD231]

Originally posted by: motoamd
That's gotta hurt! 95% drop....

That's for sure. I'll be the first to say it, I've been quite dissapointed with all but one Via based motherboard I've had (MSIK7T266). I know alot of people have had the same bad luck and I think their poor chipsets are starting to bite them in the a**.

 

[DaveSimmons]

Let's see:
* no license for P4 chipsets -> budget market goes to SiS
* AMD chipset / driver problems -> fewer people buy AMD+VIA instead of overpriced P4
* C3 processor only semi-compatible with x86 apps and runs dog-slow -> people avoid it for low-power / quiet PCs

They need to get their act together or nVidia and SiS will be the only ones left to take on intel.

Aside from building better chipsets, perhaps they should buy Transmeta for better low-power CPU/mobo combos for slimline / set-top / quiet / home theater / tablet PCs.

 

[andreasl]

Not only that but AMD is getting serious about it's chipsets for the Hammer line. In addition numerous other companies like Nvidia and ALi will get a fresh start selling Hammer chipsets. And by the end of this year the P3 line from Intel will be discontinued for good. Looks like VIA is getting squeezed from all directions now and in the future.

 

[Pabster]

No surprise. It's about time VIA's shoddy workmanship bites 'em in the ass. What goes around comes around

 

[aswedc]

Hmm diversification...I'm interested in seeing if they can come up with a decent CPU with the Nehemiah core at this years Microprocessor Forum...

 

[BFG10K]

I think more people are going with Intel or SiS chipsets instead of with VIA's.

 

[BD231]

Originally posted by: BFG10K
I think more people are going with Intel or SiS chipsets instead of with VIA's.

Agreed. If anything I think VIA made most their profit off the consumer PC market, and if you look at the computers in stores today, you dont see nearly as many Via based PC's a you would have 2 years ago.

 

[socketman]

Via definitely has had their share of problems. One first hand account is interesting:

AMD did a reference chipset for the athlons. the AMD 760/761. They released these specs to Via. Via took them and decided there were a few components they could "cut corners" on. So they did. THen all of a sudden they got crappy chipsets. VIA calls AMD and says their reference design is flawed and AMD needs to fix it. Guess what AMD said?
"Ummmm.. how about not using components we didnt specify?"

I like VIA cuz they were one of the first and only chipset makers to support AMD. Without them it would have been hard for athlon to go mainstream (arguably its not all that mainstream). But people were scared to support AMD fearing Intel would cut them off. Noone wanted to say anything offcial about supporting AMD.

Oh well, its still no excuse for crappy chipsets though.

 

[AndrewPaulNet]

I think Via is too 'diverse' in it's thinking; too soon anyway.

They need to 'specialize' in one thing before even thinking of taking on something else. Their chipsets were'nt too steady back in the day either. What they should have done is try to perfect them....ok, no way to perfect something like chipsets, but at least try to get them as stable as possible?

Also, I don't know how this chipset thing works, technically...but I don't think it's fair to call it a crappy chipset overall, if it works well in certain systems and not in others. I think it's up to board manufacturers to work around a chipset to make the board a better, more stable board.
There's no reason why 1 board can be kickazz and they other crappy, and blame VIA for that.

I'd say cut the processor....I don't have that much money and I still would never buy it or reccommend it, even to my worst enemy. Now is a bad time to enter the end user market for cpus with intel and amd kicking it at over 2ghz. If anything, wait till they're both stuck and try something then....I think if they go back to a few things, chipsets etc. then they'd do alot better. Sis and Ali I don't see doing anything but chipsets....and look at em' go?

I hope Via does good. Since I started buying AMDs I stuck with Via and I'd like to be loyal in my choice of PC buyings -- but hell if it sucks that big by the time I'm ready to upgrade, I'm, moving to something else.

 

[Insane3D]

Originally posted by: BFG10K
I think more people are going with Intel or SiS chipsets instead of with VIA's.

Not if they are building AMD systems...

 

[sandorski]

Hmm, I think the only VIA issue affecting them is their lack of an official P4 chipset. The whole tech sector is in the dumps, VIA is no exception.

 

[Dolemite76]

if they can get a license from intel for their P4 chipsets... then this should change their situation... hopefully AMD Hammer sales will help out VIA in the future...

 

[boyRacer]

I dunno... even with a license for the P4... i still wouldn't pick a VIA over an Intel chipset if i had the choice.

 

[BD231]

Originally posted by: BoYRaCeR
I dunno... even with a license for the P4... i still wouldn't pick a VIA over an Intel chipset if i had the choice.

I dont think many people who knew better would

 

[NOX]

Originally posted by: DaveSimmons
Let's see:
* no license for P4 chipsets -> budget market goes to SiS
* AMD chipset / driver problems -> fewer people buy AMD+VIA instead of overpriced P4
* C3 processor only semi-compatible with x86 apps and runs dog-slow -> people avoid it for low-power / quiet PCs

They need to get their act together or nVidia and SiS will be the only ones left to take on intel.

Aside from building better chipsets, perhaps they should buy Transmeta for better low-power CPU/mobo combos for slimline / set-top / quiet / home theater / tablet PCs.

I agree. The only thing is I don't think SiS will need to take on Intel; they obviously are working with them. VIA on the other hand decided not to work with Intel, and it's starting to show. NVIDIA may be next if they don't watch out.

SiS obviously knows it?s best to work with the other manufacturers (weather it be Intel or AMD, or weather you like it or not) to make your product work in this industry, butting heads with the big boys will get you no where.

I wont even mention VIA?s other problems, just to say that since the MSI K7T I have not bought or recommended another VIA based board (though my IT7 has a VIA chip on it, which actually had me apprehensive at first).

 

[Spook]

All I can say is Good. They sucked my money, and have lost my business awhile back. I can't believe how so many of us on this board excused the 'sins' of VIA for so long... They had so many bugs, and yet, because they were the fastest, and most veristile, we bought into them. I sold out of via at the beginning of this year, and bought up a 2G P4, and haven't looked back since. This thing is great. I've had 1 OS reload all year, on 3 systems(all P3 or P4)...

Well, they had their day in the sun...

 

[daywalker]

AMD falls = VIA falls

Common sense

 

[ssanches]

Originally posted by: Insane3D

Originally posted by: BFG10K
I think more people are going with Intel or SiS chipsets instead of with VIA's.

Not if they are building AMD systems...

True. The KT333 is the fastest (and most widely used DDR-333) chipset for the Athlon currently.

 

[merlocka]

Originally posted by: motoamd
That's gotta hurt! 95% drop....

The 95% was a drop in earnings... at least they are still making money which is more than I can say about alot of semi's right now.

 

[MGMorden]

Agreed w/ merlocka. They had a drastic earnings fall, but the company is still profitable. It's still paying it's bills. I wouldn't worry about Via going anywhere unless it starts loosing money. Personally I think Via is a good thing. Granted competition doesn't play out to any huge degree in the chipset market (most of the alternative makers are always going to be similarly priced to each other and always lower than intel), and we still have nvidia, ali, and sis to make our athlon chips go (and if push comes to shove AMD can crank out chipsets for their chips), but Via has helped the Alternative market for a long time (even back when AMD and Intel ran on the same platform Via had their infamous MVP3, which though troublesome, was a lot cheaper than Intel's offerings).

 

[Sunner]

Originally posted by: BoYRaCeR
I dunno... even with a license for the P4... i still wouldn't pick a VIA over an Intel chipset if i had the choice.

I wouldn't either, but VIA probabaly doesn't care too much about that.
OEM's who can save ~30$ per box sold with a VIA chipset instead of an Intel one will and do care.

I agree that the one thing that's seriously hurting VIA right now is the lack of an AGTL license.

The 95% was a drop in earnings... at least they are still making money which is more than I can say about alot of semi's right now.

This is also very true, there are few companies in the IT sector that can claim to make money these days.
Heck, Sun posted their first numbers in forever last(or was that two?) Q's ago.

The only ones who are still doing OK right now are the real behemoths, such as Intel, IBM, MS, etc.

 

[BFG10K]

Not if they are building AMD systems..

Yeah but SiS is definitely gaining popularity in the AMD world. Two years ago they were pretty much unheard of but now they have quite a solid line of products supporting AMD processors.

 

[Insane3D]

Originally posted by: BFG10K

Not if they are building AMD systems..

Yeah but SiS is definitely gaining popularity in the AMD world. Two years ago they were pretty much unheard of but now they have quite a solid line of products supporting AMD processors.

Yes, and no. Via has still strong armed them out of the market. There are very few Sis based motherboards out for the Athlon right now...