Mitac International Corp (神達電腦), one of the top three personal computer (PC) makers in Taiwan, said yesterday that new orders for PCs and servers will result in company sales jumping threefold in the second half of the year compared to the first.
"We've received huge orders from Dell Computer Corp and from NEC Corp and we're expanding our business with other OEM customers," said Justine Liu (
"We are seeing a pick up in both [the PC and server] markets. From the PC side we are seeing a major pick-up in orders to be delivered later this year," she added.
Business is so brisk that the company is nearing the completion of a bid to purchase US-based Software Logistics Corp (iLogistics), to help build up its online distribution system and provide a gateway to new markets like India and Ireland.
By tripling sales in the second half of the year, Mitac could become Taiwan's next US$1 billion-a-year company, according to analysts.
Last year, the firm sold NT$28.4 billion (US$832.8 million) worth of equipment, while this year sales could rise by a third to NT$44.16 billion (US$1.3 billion), according to analyst estimates based on a tripling of revenues in the second half of the year.
Sales at the firm have already begun to grow. In May, a month when most companies in Taiwan saw a drop in sales, Mitac took in NT$2.69 billion (US$78.9 million), a huge jump from a month earlier when sales hit only NT$1.66 billion (US$48.7 million).
Liu said lower prices for Intel central processing units (CPU), the brains of a computer, coupled with stiff competition in the hardware business overall, have made PC prices so attractive that people are upgrading.
Intel slashed prices on their CPU at the beginning of this month and some analysts believe consumers were waiting for the price cuts before buying a new PC.
In line with Mitac's pronouncement, two of the world's top market researchers also boosted their estimates for the PC industry yesterday.
International Data Corp (IDC) said global PC shipments will jump 4.7 percent this year to 139.7 million units, compared to the 133.4 million PCs sold a year ago. Last year, the market fell 4.1 percent from its highest point ever in 2000, according to the US-based market researcher.
Next year, IDC predicts the PC market will take off again, with 11.3 percent growth.
Dataquest Inc, the market researcher run by Gartner Group, is slightly more bullish than IDC, predicting 5.4 percent growth this year after earlier saying PC shipments would grow by 4.7 percent.
Some analysts stressed caution, however, pointing out that early signs of a PC industry upturn usually do not show themselves until back-to-school spending kicks in next month.
"Visibility is still fairly limited," said Chris Hsieh, chip industry analyst at ING Barings in Taipei.
Electronics firms worldwide have said the rest of the year is too difficult to predict due to continuing economic uncertainties.
Still, Hsieh said another powerful indicator of rising PC sales, the DRAM memory chip market, is showing signs of life again after fizzling out last month.
"Recently there has been some trading activity on the local spot market," he said.
"There's a very close relation between [the PC and DRAM industries]. DRAM traders won't start buying unless they see some early signs" of an upturn in the PC market, Hsieh said.
"DRAM traders are among the smartest in the world and they [know how to predict] the market -- but of course they aren't always right."
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