The major semiconductor manufacturer ESS warned that their Q4 results would be below expectations. The company puts the blame on slowing demand of DVD and VCD players. Their announcement caused a 6 percent fall in their shares, and it was reflected to other chip makers' shares as well.
The warning came as little surprise to analysts. ESS had issued a similar pre-announcement before its third-quarter earnings release, in which it warned of a slowdown in demand for DVD players. See full story.
In the fourth quarter, growing inventories have combined with sharp price competition to hurt the company. Stanford Financial analyst Chris Chaney said MediaTek, a Taiwanese chipmaker, has been trying to take market share in the DVD player segment, which has resulted in lower prices.Source: MarketWatch