Alcatel-Lucent Blames Component Shortage As Reason For 18.1% Decline in March 2010 Quarter

Singles Out Capacitors As One of The Primary Parts Coming Up Short

Alcatel-Lucent reported revenues of 3,247 million Euros in the quarter ending March 31, 2010, which is an 18.1% decline in quarter-to-quarter revenues for the company compared t o t h e December 2009 quarter when revenues were 3,967 million Euros. T h e c omp a n y ’ s CEO Ben Verwaayen, cited component shortages as being a primary reason for the drop in quarter-to-quarter revenues. CEO Verwaayen also noted a slow down in demand from China for communications related infrastructure equipment, but an increase in demand from North America. In a press release issued by the company, CEO Verwaayen was quoted as saying- “We are witnessing a recovery in the telecommunications equipment and related services market in some geographical areas especially North America. This recovery is driven by key technologies such as IP, terrestrial optics and WCDMA/ LTE. With a solid position in all of these areas, Alcatel-Lucent is experiencing a strong increase in demand.

However, we were not able to fully satisfy customer demand for our products due to tightening components availability. This resulted in a weak financial performance this quarter, which does not reflect the overall underlying momentum within the company.” In a New York Times interview published May 6, 2010 CEO
Verwaayen clarified that specific types of components- namely capacitors and transistors, were in short supply and had a negative impact on their revenues. The article also notes that Ericsson, the global market leader in telecom network equipment, had also cited a supply shortage when it announced a 9 percent decline in
first-quarter sales on April 23. Telecommunication infrastructure equipment requires large volumes
of large case size tantalum chip capacitors; high capacitance MLCC and large can aluminum electrolytic capacitors, all of which are in short supply.