Taiwan's Notebook PC Shipment to Top 110 Million Units in 2008

(Business News & Technology News, 13 May 2008)

Taiwan's notebook PC shipment volume is expected to reach more than 110 million units this year, according to Taipei-based ICT industry research institute Market Intelligence Center (MIC). This will be driven by the expanding consumer market segment for notebook PCs and strong demand in emerging markets.

However, the insufficient production capacity of battery cell suppliers in the second quarter could have a negative impact on shipments. Also, the subprime mortgage crisis in North America could spread to the Western European market, beginning from the end of the second quarter of 2008, while the replacement effect of low-price notebook PCs on mainstream notebook PCs is expected to emerge in the second half of 2008.

In the first quarter of 2008, notebook PC demand remained strong worldwide, except for North America, which experienced the effects of the subprime mortgage crisis. Notebook PC demand was particularly strong in China.

"Some shipments were affected in the first quarter due to production shortages caused by the fire at LGC's battery cell factory in March this year," says Nicole Huang, MIC industry analyst. "However, as PC brands raised their shipment targets, they strengthened their relationships with key component suppliers, while battery makers and ODM (Original Design Manufacturing) makers still had sufficient inventory to meet notebook PC demand in the first quarter of 2008. PC brands were therefore able to approach their shipment targets in the first quarter."

Notebook PC shipment volume is estimated to have reached 25.1 million units in the first quarter of 2008, up 35.6 percent year-on-year.

Meanwhile, due to high-end models launched by several PC brands in the first quarter, ASP decline of the Taiwanese industry was not dramatic, slipping from $522 in the previous quarter to $518 in the first quarter. Taiwanese notebook PC shipment value is estimated at $12.99 billion in the first quarter, up 26.9 percent year-on-year. Looking ahead this year in terms of ASPs, manufacturers say that the increasing costs of raw materials, China's new Labor Contract Law and new tax laws, and rising production costs, are expected to be reflected in notebook PC prices. In addition, as shortages of notebook PC batteries are expected to be an issue into the second quarter, coupled with rising prices, notebook PC ASP is expected to further increase.

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