Sat, Jul 12, 2003 - Page 10 News List

Quanta surges ahead of notebook rivals


Quanta Computer Inc (廣達電腦) is extending its lead as the world's biggest maker of notebook personal computers, winning more orders at the expense of smaller Taiwanese rivals from Hewlett-Packard Co and other companies that market PCs globally.

Monthly sales reports that companies in this country are required to file show that Quanta's second-quarter sales nearly doubled to NT$65.3 billion (US$1.9 billion), from NT$33.5 billion a year ago.

Quanta's two smaller domestic rivals posted gains of less than 10 percent. The fourth and fifth-largest notebook PC makers in the country, which accounts for about two-thirds of the world's laptop production, reported declines.

Quanta's growth may threaten the existence of some of its competitors in the US$53 billion global notebook market, analysts said.

"The smaller players will find it increasingly difficult to compete," said James Johnstone, an analyst with Gartmore Investment Management, which counts shares in Quanta and No. 2 laptop maker Compal Electronics Inc (仁寶電腦) among the US$70 billion it manages globally.

"Customers are happier with the laptops that Quanta makes," he said.

Quanta has sacrificed earnings to build market share. The company's first-quarter profit fell 8 percent to NT$2.8 billion on sales that rose 61 percent, while Compal's net income in the same period rose by more than 68 percent to NT$2.4 billion.

Quanta shares, which have gained more than 52 percent this year, rose NT$1.50, or 1.9 percent, to NT$79 in Taipei. Compal shares, up more than 36 percent this year, gained NT$0.30, or 0.2 percent, to NT$49.20.

"I like Quanta more than Compal," said Michael Ding (丁予嘉), who counts Quanta shares among the equivalent of US$4.2 billion he helps manage for International Investment Trust Co (國際投信).

"The big technology companies in Taiwan are going to do better," he said.

Compal posted a 9 percent gain in second-quarter sales and has so far shunned orders that force it to pare profit.

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