Lenovo Group Ltd (聯想), the Chinese personal-computer maker that reported a loss last week, doesn’t expect demand in the US and Europe to rebound this year, chief executive officer Yang Yuanqing (楊元慶) said.
“We need to wait until next year before we see growth,” Yang said in a telephone interview yesterday. “In emerging markets, including China, we have a more optimistic outlook.”
Yang replaced Bill Amelio as Lenovo’s chief executive after China’s biggest PC maker posted its first loss in three years as US and European companies cut orders amid the worst economic downturn since the 1930s. Raleigh, North Carolina-based Lenovo would “more forcefully” develop its consumer business and expand into emerging markets to drive growth, Yang said.
“The global recession appears to be making 2009 a throwaway year,” Mark Moskowitz, an analyst at JP Morgan & Chase Co, wrote in a Feb. 5 report. The bank this month revised its forecast for global PC shipments to a 14 percent decline this year, from its previous projection for a 3.7 percent drop.
Revenue in the Americas region, Lenovo’s biggest market outside China, fell 22 percent in the three months to Dec. 31, the company reported last week. Sales in Europe, Middle East and Africa declined 32 percent, it said. Lenovo’s loss of US$96.7 million in the quarter, the first since 2006, was triple the median of four analyst estimates compiled by Bloomberg.
The decline in PC demand in China last quarter was “a one-off,” Yang said yesterday. He was “optimistic” China would outgrow other PC markets.
Sales in China, Taiwan and Hong Kong fell 6.5 percent in the three months to Dec. 31, the PC maker said, citing a downturn in the Chinese economy. The Chinese company moved its headquarters to the US after buying International Business Machines Corp’s PC business in 2005.
The reduction of 2,500 overseas jobs that Lenovo announced last month would “help us return to profitability,” Yang said. The company said it expects savings of about US$300 million in the year ending March next year as a result of the cuts.
Lenovo expects to post more losses this year and will return to profit next year, Reuters reported yesterday, citing chairman Liu Chuanzhi (柳傳志). The company doesn’t plan to pay dividends in the year ending on March 31 and the following fiscal year, Liu said.
ELECTRONICS BOOST: A predicted surge in exports would likely be driven by ICT products, exports of which have soared 84.7 percent from a year earlier, DBS said DBS Bank Ltd (星展銀行) yesterday raised its GDP growth forecast for Taiwan this year to 4 percent from 3 percent, citing robust demand for artificial intelligence (AI)-related exports and accelerated shipment activity, which are expected to offset potential headwinds from US tariffs. “Our GDP growth forecast for 2025 is revised up to 4 percent from 3 percent to reflect front-loaded exports and strong AI demand,” Singapore-based DBS senior economist Ma Tieying (馬鐵英) said in an online briefing. Taiwan’s second-quarter performance beat expectations, with GDP growth likely surpassing 5 percent, driven by a 34.1 percent year-on-year increase in exports, Ma said, citing government
SMART MANUFACTURING: The company aims to have its production close to the market end, but attracting investment is still a challenge, the firm’s president said Delta Electronics Inc (台達電) yesterday said its long-term global production plan would stay unchanged amid geopolitical and tariff policy uncertainties, citing its diversified global deployment. With operations in Taiwan, Thailand, China, India, Europe and the US, Delta follows a “produce at the market end” strategy and bases its production on customer demand, with major site plans unchanged, Delta president Simon Chang (張訓海) said on the sidelines of a company event yesterday. Thailand would remain Delta’s second headquarters, as stated in its first-quarter earnings conference, with its plant there adopting a full smart manufacturing system, Chang said. Thailand is the firm’s second-largest overseas
‘REMARKABLE SHOWING’: The economy likely grew 5 percent in the first half of the year, although it would likely taper off significantly, TIER economist Gordon Sun said The Taiwan Institute of Economic Research (TIER) yesterday raised Taiwan’s GDP growth forecast for this year to 3.02 percent, citing robust export-driven expansion in the first half that is likely to give way to a notable slowdown later in the year as the front-loading of global shipments fades. The revised projection marks an upward adjustment of 0.11 percentage points from April’s estimate, driven by a surge in exports and corporate inventory buildup ahead of possible US tariff hikes, TIER economist Gordon Sun (孫明德) told a news conference in Taipei. Taiwan’s economy likely grew more than 5 percent in the first six months
SUPPLY RESILIENCE: The extra expense would be worth it, as the US firm is diversifying chip sourcing to avert disruptions similar to the one during the pandemic, the CEO said Advanced Micro Devices Inc (AMD) chief executive officer Lisa Su (蘇姿丰) on Wednesday said that the chips her company gets from supplier Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would cost more when they are produced in TSMC’s Arizona facilities. Compared with similar parts from factories in Taiwan, the US chips would be “more than 5 percent, but less than 20 percent” in terms of higher costs, she said at an artificial intelligence (AI) event in Washington. AMD expects its first chips from TSMC’s Arizona facilities by the end of the year, Su said. The extra expense is worth it, because the company is
RSS