PC supply chain weakening, says UBS

In a vaguely worded recap of their Asian bus tour, UBS indicates PC component sales have slowed thus far in March. Desktops and servers are the primary weak spot.

DRAM is very weak with prices below cash cost for many vendors. Some of these vendors won't even make sales below cash cost. PC makers have built inventory, exacerbating the weakness.

The iPod Touch demand has fallen off sharply and builds are running 100-300k a month down from a peak of 1.2 mil units at one part supplier. I think the Touch is a silly in between product and I don't see why anyone would get one instead of the iPhone. I'd speculate others are figuring that out. I see no indications that the current model iPhone is picking up steam so it's not upselling driving the iTouch weakness.

Cell phone parts, which took a dive in mid February, seem to have stabilized and UBS says there's some better order activity. I don't want to buy cell phone parts -- I think the weakness there is likely to persist for a while.

They also came away negative on Nvidia but didn't really get into why. Curious.