Fri, Feb 09, 2001 page17

• Compal soars as world slumps

  COMPUTERS Taiwan's third-largest notebook PC manufacturer saw a 58 percent increase in sales last year, and its revenues are predicted to continue rising this year

  • By Dan Nystedt / STAFF REPORTER
  • • 
    • 
    • 

  Despite a global slowdown in PC and notebook computer sales, Taiwan-based contract manufacturer Compal Electronics Inc (仁寶) managed to increase sales by 58.4 percent to NT$74.4 billion (US$2.3 billion) last year, growing faster than any other notebook maker in Taiwan. The company's after-tax profits increased 10.8 percent to NT$5.9 billion (US$184 million) last year.

  While analysts expect the company to further increase revenues this year, profits will be harder to come by. International customers like Hewlett-Packard, Dell and Toshiba are negotiating new deals with the nation's notebook makers, cutting profit margins to help slash costs and revive the market.

  In fact, three securities firms, ING Barings, JP Morgan and Indosuez W.I. Carr reportedly downgraded their ratings on Compal stock from "buy" to "hold" yesterday because of falling profit margins at the tail end of last year. Profit figures dropped from 10.3 percent in the third quarter last year to 8.8 percent in the fourth, a sign the PC slowdown has taken effect.

  Although the market looks bleak, analysts expect a number of factors to work to the advantage of Taiwanese notebook makers this year. In addition to falling component prices on thin film transistor -- liquid crystal display (TFT-LCD) screens and the lower value of local currency against the US dollar that may help bring down notebook prices, Taiwan companies in this line of business also expect help from the Japanese.

  "The growth driver for the notebook industry will be orders from Japanese companies this year, and Compal has the best relationship [among Taiwanese manufacturers] with Japanese notebook vendors," said Henry Wang (王漢寧), electronics analyst at EnTrust Securities (永昌綜合證券).

  Increased notebook orders from Japan are expected to be a major bright spot for local notebook makers. In contrast to their US counterparts -- who outsource nearly 100 percent of notebook manufacturing to Taiwan already -- Japanese notebook sellers began outsourcing only a few years ago. Most of their products are still manufactured at home.

  Compal has nurtured a relationship with Japan's largest notebook seller, Toshiba, and analysts expect orders from that company alone will reach 1 million units this year, a 66 percent increase over last year. The company expects to produce a total of 2.6 to 2.9 million notebooks this year.

  In the year ahead, mobile phone production will become another strong area for the company, according to Duke Lin, a senior manager at the firm. He said the company would produce 5 million handsets this year and that they anticipate turning a profit on them.

  Most analysts see the mobile handset industry as a long-term project, with little or no profit expected for the next few years.

  Compal ended the year 2000 as the third-largest notebook maker in Taiwan with 1.8 million units. The top spot went to Quanta Computer Inc (廣達電腦) with 2.6 million units, followed by Acer Computer (宏電) in second place with 1.95 million units. Local notebook PC production is predicted to rise 35 percent this year.

  For your information

  Last year's top guns

  * Quanta Computer was Taiwan's leading notebook PC maker with 2.6 million units. * Acer Computer was the second-largest producer of notebooks in 2000 with 1.95 million units. * Compal sold1.8 million notebook PCs last year.
• Most Popular

  • 1

    China could ‘arrest’ Taiwanese abroad

  • 2

    Chinese influencer’s residency revoked

  • 3

    MAC condemns entertainers’ China posts

  • 4

    Use of mobile devices to be forbidden in schools

  • 5

    Tallon Griekspoor stuns top seed Alexander Zverev