Fri, Sep 23, 2005 - Page 10 News List

Quanta sees tight supply of components


Quanta Computer Inc (廣達電腦), the world's biggest notebook computer maker on a contract basis, yesterday said Christmas demand looks strong, but tight component supply could cap shipments.

"We are seeing robust demand ahead in the fourth quarter, making it [the final quarter] a stronger season than the third quarter," said Michael Wang (王震華), chief operating official of Quanta, on the sidelines of a forum arranged by Hewlett Packard Co yesterday.

But, current constraints in the supply of components such as flat panels and chips could adversely affect Quanta's laptop computer shipments, Wang said.

Wang said hot sales of the digital music player iPod series was a major reason behind the insufficient supply of chips.

Smaller rival Compal Electronics Inc (仁寶電腦) yesterday said scant supply of chipsets has already started to slow its notebook shipments, according to company president Ray Chen (陳瑞聰).

Despite the component worries, Wang was optimistic about the notebook computer industry. He expects sales of laptops to grow by 20 percent next year, from an estimated 60 million units this year, on growing replacement demand for desktop computers.

Despite rising demand, notebook makers face cutthroat competition, which leaves limited room for price cuts, Wang and Chen said.

"Quanta's gross margin for next year won't be lower [than that of this year]," Wang said.

The company's consolidated gross margin was 4.34 percent in the first half of this year.

Compal's Chen also said gross margins for notebook makers are stabilizing.

Compal is struggling to keep its gross margin above 5 percent amid falling prices.

Notebook supply chain

* Quanta says demand for the Christmas season should be robust.

* Tight supply of components such as flat panels and chips could constrain shipments, however.

* Strong sales of the iPod music player are a major reason behind a chip shortage, a Quanta official said.

* Compal said a shortage of chipsets is already curbing its notebook shipments.

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