Fri, Jul 25, 2003 - Page 10 News List

IT sector survey shows optimism

By Annabel Lue  /  STAFF REPORTER

A majority of Taiwanese information technology (IT) manufacturers are optimistic over sales projections for the second half of the year, although the growing momentum in sales may not reach the levels some have been expecting, according to a survey released Wednesday.

The Market Intelligence Center (MIC, 市場情報中心) said the survey found 84.1 percent of local IT manufacturers described their outlook for the second half of the year as "positive," saying global IT demand is on the rise.

About 14.4 percent of respondents expected stable development over the next six months, while about 1.5 percent of those polled said the situation will be "getting worse slowly" by the year end of the year, according the poll.

The center's survey of 264 executives of local IT companies between June 17 and July 4 also found only 21 percent said they would see significant sales growth in the last quarter of this year and nearly 63 percent companies said they are expecting to see slow sales in that period.

"Compared with the survey we conducted a year ago, local companies are more optimistic this time," Victor Tsan (詹文男), MIC's managing director, said at a press conference. Last year only some 71 percent of those polled decribed the market outlook as "positive," he recalled.

Although the latest poll showed optimism across various IT sectors, notebook computer making is expected to ignite a real upturn in the second half of the year, analysts said. Taiwan is the world's largest supplier of notebook computers, accounting for 60 percent of the global market share.

"We started to see more orders coming in since late last month once the SARS outbreak was brought under control," said Rock Hsu (許勝雄) chairman of Compal Electronics Inc (仁寶電腦), one of the world's largest notebook PC suppliers. The company's shipments are expected to peak this month or next month, and notebook PC shipments in the current quarter may triple over the previous quarter, Hsu said.

According to the statistics released by MIC yesterday, Taiwan is expected to ship 5.84 million notebook PCs in the third quarter of the year, up 26.5 percent from a year earlier.

Analysts said the surge can be attributed to the computer replacement trend.

"It is commonly expected that individuals as well as companies would buy new computers to replace obsolete PCs within these two years," said Cynthia Chyn (秦素霞), deputy managing director at MIC.

She explained that the average PC life cycle is about three or four years, and many users bought new PCs just prior to the turn of the century over fears of the possible impact of the Y2K bug. Chyn said therefore the "next replacement peak should fall within this year and next."

Another market analyst said that with the global economy gradually picking up, more company spending is expected to benefit local IT manufacturers.

"The latest export order figure just indicates that the economy is in an upturn," said Grace Chen (陳星嘉), an industry analyst at Insight Pacific (月涵投顧).

The nation's export orders last month grew at their fastest pace in five months to US$13.8 billion, a 12 percent increase from a year earlier, the Ministry of Economic Affairs reported Wednesday.

But another analyst appeared less optimisic, saying that the pace of the rebound could be very slow.

"Although the economy is moving upward, it is still hard to predict when strong growth will take place," said Molly Lin (林美如), an IT analyst at Polaris Securities Co (寶來證券).

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