Computer Chip Shortage Slows Kaypro Output
Computer manufacturer Kaypro Corp. said Tuesday that the industry-wide shortage of semiconductors called DRAMs will have a “dramatic” negative impact on its financial results for the current quarter unless the supply of the chips improves soon.
The shortage of the DRAMs, which stands for dynamic random access memory chips, have caused a “10% to 30% reduction in shipments in all lines” of Kaypro computers in recent weeks, Kaypro President David Kay said in an interview after Tuesday’s annual shareholder meeting.
The reduction in shipments at Kaypro, which is based in Solana Beach, varies on a daily basis according to the availability of the chips, he said.
Retail Price Steady
Kaypro controller Bob Gorski said the shortage of DRAMs, which allow computers to store information for quick retrieval, has caused prices of the chips available to increase to as much as $10 each, compared with $3 as recently as late January.
The price increases have particularly hurt sales of Kaypro’s PC 286 model, a computer line introduced in December whose “guts” include 36 DRAMs. Despite the higher cost of the chips, Gorski said the PC 286 retail price has held steady at $2,995.
The shortage of DRAMs has been caused by declining Japanese exports and increased U.S. computer production, industry sources said. Though 1.2 billion of the chips will be sold this year, another 250 million could be sold if they were available.
Kaypro Chairman Andrew Kay told shareholders that even when chips can be had, they often are delivered late. “The ones we ordered from Panasonic for Feb. 15 arrived at the end of March.”
At the meeting, Andrew Kay answered several hostile questions from Kaypro shareholders who complained about Kaypro’s low stock price. Kaypro shares closed up $.125 at $.8125 per share in Tuesday trading. The shares have trended steadily downward since Kaypro’s initial public stock offering in 1983 when shares sold at $10 each.
Reported a Loss
Asked by one shareholder when the stock price was going up, Kay responded: “The Man who knows such things hasn’t talked to me lately.”
For the fiscal year ended last Aug. 28, Kaypro reported a loss of $9.6 million on sales of $105.6 million. A significant portion of the loss was due to a $5.5 million write-down of inventory related to a discontinued line of Kaypro computers and to a write-off of a $2.1-million account receivable owed by Stars to Go, a maker of video cassette rental systems.
Kaypro also disclosed at the annual meeting that it will soon be introducing a “clone” of International Business Machines’ PS/2 line of computers. The company also plans to begin marketing its new Micro 1, a desk-top computer based on the Intel 8088 microprocessor chip that will retail for $899.
