On the Call: Motorola co-CEO on chip supplies

NEW YORK

Motorola Inc. reported surging sales of smart phones in the second quarter, but co-CEO Sanjay Jha, head of the phone division, said it is hampered by short supplies of chips.

An analyst asked him to explain how this affects its latest smart phone, the Droid X, which went on sale through Verizon Wireless two weeks ago.

QUESTION: Can you talk a little bit about the supply and demand dynamics of the Droid X launch?

ANSWER: Certainly Droid X has exceeded our expectations. At the appropriate time, Verizon will comment on their sales numbers. But we believe that we will catch up with demand some time through the course of this quarter. We find multiple components in the industry being constrained.

I think the investment largely in semiconductor space of various different kinds over the last two and a half years has been below par. And I believe that the industry now is trying to compensate for that, and there is some greater investment in the semiconductor space. But at the moment I would say that that is probably our largest constraint. We are working very closely with our partners. As some of you know, I was in that space, and I have a very good relationship in that space. And I expect that we will overcome some of those issues as we progress through the year.