NEW YORK (Reuters) - Technology companies spot signs of a pickup in demand but remain wary or skeptical that their sector has hit bottom, with many still cautious that the uptick merely reflects restocking by customers rather than a fundamental recovery in demand.
Speaking at the Reuters Global Technology Summit in New York on Monday, chief executives from an array of IT firms from Advanced Micro Devices Inc to Sybase Inc offered dour assessments of the economic environment.
Technology companies were stung this year by a steep drop in sales as consumers and businesses alike dialed back spending. Worldwide PC shipments fell 7.1 percent in the first three months of 2009, according to research firm IDC.
Suppliers responded by drastically cutting back on production, leaving inventories lean. Few analysts are willing to say that demand is truly recovering, given mounting job losses and an uncertain economy.
"In a situation like this particularly, a bottom is something you can really call when you're past it and looking down at it," said Advanced Micro Devices CEO Dirk Meyer.
"I'm hopeful things will stabilize and we'll see a resumption of growth in the back half of the year," he added.
Sybase foresees technology sector spending remaining tepid for at least a year and possibly until 2011.
"Nobody should run their business expecting the party is starting again," said CEO John Chen.
But Nvidia Corp CEO Jen-Hsun Huang sounded a discordant note, asserting that indeed a bottom has been reached, echoing comments made by Intel Corp, the world's largest chipmaker, last month.
"Demand appears to be growing again -- obviously from a lower base, but we're seeing demand growing nicely," Huang said. "We're actually seeing that there are spot shortages in the channel for several of our products."
HISTORICALLY LOW
Nvidia's dedicated graphics chips are featured in desktop PCs and more high-end notebooks. The company is also making a push into low-cost netbooks with its Ion product.
Huang said industry inventory levels were near historical lows after cutbacks in production over past quarters.
Sanford C. Bernstein analyst Toni Sacconaghi said it is too soon to tell when a recovery will take hold. He said the United States appears to have stabilized, while Europe looks weak.
"There's a question whether Europe is going to get worse before it gets better. Continued...
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