Compal Electronics Inc (仁寶), which makes notebook computers for Lenovo Group (聯想), Hewlett-Packard Co and Dell Inc, is forecast to ship 42.8 million laptops this year, higher than the company’s original estimate of 42 million, CIMB Securities Ltd said yesterday.
The company, which also manufactures products for Apple Inc’s iPad, as well as smartphones for Lenovo and HTC Corp (宏達電), could ship 35.4 million smart devices this year, up 128.4 percent from last year, CIMB analysts Wang Wanli (王萬里) and Felix Pan (潘俊宏) said in a client note.
Overall, the company’s sales and earnings this year may top market expectations on the back of strong demand for commercial notebook computers and in the wake of its smooth integration of handset subsidiary Compal Communications Inc (華寶), the analysts said.
Net income may increase 150 percent to NT$6.17 billion (US$20.55 million) this year from NT$2.47 billion last year, with earnings per share of NT$1.4, while consolidated sales may rise 21.87 percent to NT$844.24 million from NT$692.75 million over the same period, CIMB forecast.
Compal, which has overtaken Quanta Computer Inc (廣達) as the world’s largest contract notebook computer maker, benefits when market demand for corporate laptops is stabilized, even though it is still premature to say the overall PC market is in full recovery as the consumer segment remained weak in the first half of the year, based on the latest industrial data compiled by both Gartner Inc and International Data Corp.
Also fueling the company’s growth momentum is an industry consolidation trend in the PC market, with Lenovo, HP and Dell gaining market share from rivals, helping push Compal’s sales for last month up 12.8 percent to NT$76.71 billion month-on-month and up 34.6 percent year-on-year. Last month’s sales were Compal’s highest in 44 months.
Last month, Compal shipped 4.4 million laptops, higher than rival Quanta’s 4.3 million units, to become the world’s largest contract notebook computer maker.
In the second quarter, Compal reported laptop shipments of 10.6 million units, up 17.8 percent quarter-on-quarter, compared with Quanta’s 11.5 million units, an increase of 9.5 percent from the previous three months.
“As long as corporate PC demand remains healthy in the second half of 2014, these three major PC vendors are likely to gain more market share globally,” Wang and Pan wrote in the note. “Other PC vendors either have limited exposure to the corporate segment or have already exited the market.”
Last week, market researcher Digitimes Research said Compal could beat Quanta in laptop shipments for the second half of the year on the back of increased orders from Lenovo, HP, Acer Inc (宏碁) and Toshiba Corp.
Compal shares gained 2.60 percent to end at NT$29.55 yesterday in Taipei trading following the report.
The stock has climbed 50 percent over the past 12 months, Taiwan Stock Exchange data showed.
CIMB upgraded its investment rating on Compal shares to “add” from “hold” and raised its target price on the stock to NT$34 from NT$28.8.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to