Fri, Mar 14, 2008 - Page 12 News List

Eee PC demand exceeds supply

BATTERY WOES Limited component supplies mean the company will have to put off its plan to introduce the low-cost notebook into more markets, an official said

By Lisa Wang  /  STAFF REPORTER

Laptop maker Asustek Computer Inc (華碩) yesterday said it was unable to keep up with demand for its low-cost Eee PC series primarily as a result of limited battery supplies, but said it would retain its shipment target of 5 million units for this year.

As Asustek cannot produce enough units to meet demand for the low-cost laptop, it is forced to put its plan of introducing the product into more markets temporarily on hold, said Lillian Lin (林倩如), director of the company's brand business.

Asustek sells the Eee PC series in most Asian countries and parts of Europe including Germany and Britain.

"Batteries are the main factor. Most notebook makers have been affected by [the factory fire at supplier] LG. We are working on it," Lin said.

Lin made the remarks on the sidelines of a product launch for the company's Microsoft Windows Eee PC, which went on sale in January in Japan.

Prices for the Windows Eee PC start at NT$12,499 for a model with a 4 gigabyte solid state drive (SSD). Prices for Eee PCs running Linux and equipped with a 2 gigabyte SSD start at NT$7,999.

Lin declined to say whether Asustek would miss its target of shipping 700,000 Eee PCs in the first quarter as a result of the battery problem.

A fire halted battery production at a LG Chem Ltd plant earlier this month. LG is South Korea's No.2 notebook battery maker.

Asustek chairman Jonney Shih (施崇棠) said, however, that the company was "seeing more positive signs for component supply in the second half for DRAM and Flash [memory]."

The goal to ship 5 million units is still achievable as growth momentum is quite strong, Shih said.

In June, Asustek plans to unveil a next-generation Eee PC with an 8.9-inch liquid-crystal-display (LCD) screen in Taiwan, the company said.

The larger-screen Eee PC will come in both Linux and Microsoft versions, it said.

"People are recognizing the growing need for a second laptop to get online easily and enjoy digital life. This is an important trend," Shih said. "We hope to create a new market that could become another NT$1 billion market."

Commenting on the US subprime credit crisis, Shih said that the impact for Asustek would be very limited because of its small presence in the US.

The company's biggest markets for its brand business are in Europe and Asia.

Shih said that although many Taiwanese electronics manufacturers were setting up operations in Vietnam, Asustek was betting on India, where it said market growth could see a sudden explosion.

"India has growth potential similar to what China's used to be," he said.

To increase its understanding of the Indian market, Shih said he had made a six day visit to the country last week, where Asustek has set up a branch with more than 100 staffers in Mumbai.

Asustek shares declined for the fourth trading session in a row to close at NT$87.7 yesterday.

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