Mainboard sales to fizzle

Tech analysts yesterday said that traditionally strong Q4 mainboard sales are sagging. Quoting a forecast from research firm Salomon Smith Barney Securities Taiwan Ltd (SSB), Fubon Securities Co (富邦證券) calls for an 11 percent drop in sales quarter on quarter. Historically, the leap from the third quarter to the fourth quarter is around 20 percent, the SSB forecast noted.

"The figure is not surprising as the fourth quarter is not the peak season it was in the past," said Fiona Chen of Fubon Securities.

Other analysts say the figure may still be too high. "Eleven percent is too aggressive. We're looking at eight percent," Wanli Wang (王萬里) at Credit Suisse First Boston told the Taipei Times yesterday.

Mainboards, also known as motherboards, are the main circuit board of a computer.

The outlook for the sector is dim. International Data Corp (IDC) revised its predictions for total worldwide shipments down last month from its June forecast of 4.7 percent growth this year, to just 1.1 percent.

In addition to the sluggish PC market, Wang points to the continuing lockout of dock workers in US West Coast ports as areas of concern. "The US is still slow and the strike situation is unclear. Even if it is solved in a week or two, the damage will still be there. It will take two or three weeks [for the market] to recover," he said.

Despite the reduction in sales figures, Wang does not see any downward pressure on unit selling prices. "November numbers are down, but the average selling price shouldn't change as CPU prices are stable," he said.

Taiwanese mainboard manufacturers took 70.4 percent of the global mainboard market share in 2001, according to statistics issued by the Market Intelligence Center (MIC, 市場情報中心). This figure is set to rise to 71.8 percent for this year and 74.1 percent next year.

The four largest mainboard manufacturers are Asustek Computer Inc (華碩電腦), Micro-Star International Co (微星), Elitegroup Computer Systems Co (精英電腦) and Gigabyte Technology Co (技嘉科技). All four declined to give fourth quarter sales predictions, or were unavailable.

Asustek is expected to fare better because of new orders from Dell Corp in Q4, Wang at Credit Suisse said. He added that at Micro-Star the recent Hewlett Packard-Compaq merger would have some impact. The newly formed conglomerate recently shifted some orders from Asustek to Microstar, local media reported last month.

Last year, Taiwan produced more than 80 million mainboards. This year the MIC predicts that the figure will rise by 6.6 percent to almost 86 million units. The research body sees a slow second half of the year compared to the first half. It predicts only 2.7 percent year-on-year growth, compared to 11.4 percent in the first half of the year.