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Compal projects shipment of 10 million notebook PCs

Driven by a rosy fourth-quarter outlook, Compal Electronics Inc (仁寶), the world's second-largest contract notebook computer maker, projects that its shipments of the product will reach the 10 million mark this year, a company executive said.

Expectations

It had shipped 4.64 million units of portable computers during the first eight months of this year and expects the number to rise to 10 million units by December, mainly bolstered by rising shipments in the fourth quarter, Compal's chairman Rock Hsu (許勝雄) was quoted by Chinese-language newspaper reports as saying yesterday.

Critical role

He said that although a low product margin has become a reality to electronics manufacturers, Taiwan still plays a critical role in notebook computer production on the global stage.

Last year, notebook computers churned out by Taiwanese makers accounted for 71 percent of total worldwide shipments, which stood at 46 million units.

Taiwan's share is expected to rise to 83 percent this year, while global shipments will reach around 60 million units, Hsu was reported as saying.

"Compal will have the chance to meet the target of 10 million units as it plans to roll out a slew of new laptop models in this quarter," said Simon Yang (楊勝帆), an analyst with the Topology Research Institute.

Uncertain

However, there are uncertain and variable factors to be considered in the last three months, including chipset shortages or stock clearances, he said, adding it would be on the safe side to adjust the figure downward to 9.5 million units.

According to Yang, Taiwanese notebook computer makers as a whole will benefit from the healthy growth of the sector this year, as shipments for worldwide and local markets are forecast to grow over 26 percent and 30 percent respectively from last year.

Relocated

As most of the manufacturers -- including Compal, Quanta Com-puter Inc (廣達電腦), Asustek Computer Inc (華碩電腦) and Wistron Corp (緯創) -- have relocated their notebook assembly lines to China, this will enable them to reap better profits by taking advantage of the low labor and manufacturing costs there.

Compal reported profit gains in the second quarter, the first in six quarters.

Its net sales grew 3 percent quarter-on-quarter to NT$51.7 billion in the second quarter, and gross margin climbed to 6.2 percent from 5.8 percent in the previous quarter.

The company's net income advanced 13 percent to NT$1.83 billion, or NT$0.53 a share, in the second quarter, from NT$1.63 billion, or NT$0.48, in the previous quarter.
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