Credit Crisis Looming Over Silicon Valley
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From San Francisco to San Jose, the effects are already palpable. This week, Apple, one of the Valley's highfliers, lost 16.3 percent of its value as investors reasonably concluded that consumers would shun expensive gadgets over the holidays in favor of lower-ticket items or paying down their credit cards. Shares in Yahoo and eBay are at their lowest levels in years.
Traveling in Europe on Monday, Steven A. Ballmer, Microsoft's chief executive, conceded that financial problems would drag down business and consumer spending in the United States and that many technology companies, including Microsoft, were vulnerable.
Other ominous signs abound. Semiconductor makers, many of which finance their capital-intensive operations with debt, have been hit hard. Advanced Micro Devices, a dimming rival to Intel, was expected to spin off its chip manufacturing operations this year to focus on processor design. Analysts say they believe the company has had trouble raising the hundreds of millions of dollars needed to make the move.
An A.M.D. spokesman, Drew Prairie, declined to comment on the status of the spinoff, saying that the company was in a mandatory quiet period ahead of an earnings release later this month.
