Acer Inc (宏碁), the world’s No. 4 PC vendor, expects its shipments to bounce back slightly next quarter as the supply of hard drives stabilizes following last year’s flooding in Thailand, a company executive said yesterday.
Floods ravaged Thailand late last year and caused many PC component factories to shut down, but now many suppliers, including hard drive makers, have begun to diversify their manufacturing locations to hedge against supply chain disruptions, Acer chairman and CEO J. T. Wang (王振堂) said.
Thailand supplies 40 percent of the world’s hard drives, recent data showed.
“By the end of the second quarter, hard drive supply will not be a problem any more,” Wang told reporters on the sidelines of a forum on corporate social responsibility organized by Acer. “The second quarter will be a better period than the first.”
Wang added that Acer did not foresee any immediate impact on its operations and PC supply chain in China after Chongqing Chinese Communist Party secretary Bo Xilai (薄熙來) stepped down last week amid Beijing’s political reshuffling.
“The messages we obtained indicates that [Beijing will] not alter its policy [of encouraging investment in Chongqing] initially,” Wang said. “I believe the secretary’s departure won’t lead to a U-turn by the government.”
However, any potential for change is still a concern for Acer because it could severely impact the Taiwanese PC industry and derail supply chains worldwide, he said.
“We will try to talk to officials during my next trip to Chongqing,” Wang said. “We need to better understand the situation.”
Last year, 35 percent of Acer’s PCs were manufactured and exported from its partners’ factories in Chongqing and that portion is expected to rise to 50 percent this year, Acer said.
In the past six months, Taiwanese PC contract makers, including Compal Electronics Inc (仁寶電腦) and Quanta Computer Inc (廣達電腦), as well as component suppliers have been shifting their production lines to the interior city of Chongqing from coastal cities such as Shanghai because of lower labor costs and preferential taxes.
In Chongqing, the number of PC component suppliers has now spiked at 700, compared with 400 not too long ago, Wang said.
Wang said the near-term outlook seemed stable. He said this quarter shipments would decrease 10 percent to 15 percent quarterly, in keeping with the company’s projection last month.
Wang attributed the decline to stagnant demand during the historically slow season and component supply shortages.
Acer shipped 9.79 million PCs in the final quarter of last year, down 8 percent year-on-year, according to market researcher International Data Corp’s preliminary tally.
“This is a reachable target. To be safe, we prefer to keep our outlook unchanged,” Wang said.
He previously said there might be a chance for the company to raise its first-quarter forecast.
Acer’s share price plummeted 2.6 percent to NT$41.2 yesterday, compared with the benchmark TAIEX’s loss of 0.89 percent.
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