Compal Electronics Inc (仁寶電腦), the world’s top notebook computer contract maker by shipments, yesterday said it expected a “single-digit percentage” sequential decline in laptop shipments in the current quarter, citing weak demand in the US and western Europe.
Compal followed the example of Quanta Computer Inc (廣達電腦), which on Tuesday revised its forecast for notebook shipments to an increase or fall of 5 percent, from its prior forecast of sequential growth of 10 to 15 percent.
“There is no good news from us, we [Compal and Quanta] are in the same boat,” Compal president Ray Chen (陳瑞聰) told investors.
Compal said early last month that it foresaw a “flat to 5 percent sequential growth” in laptop shipments in the third quarter.
Demand is very slow in the US market, despite there being some buying activity on the corporate side. Demand is also sluggish in western Europe, Chen said.
However, Compal expects fourth-quarter shipments to rise more than 10 percent from the third quarter based on current order visibility, and its full-year shipments target of 50 million units is still achievable.
Compal shipped 24.8 million portable PCs in the first six months, beating Quanta by 100,000.
The company posted second-quarter earnings of NT$6.4 billion (US$200 million), representing a year-on-year growth of 99 percent, but a 25 percent drop from the first quarter.
Revenues in the second quarter reached NT$217.1 billion, an increase of 78 percent from a year earlier, and flat from the first quarter.
Chen said Compal is stepping up its diversification into LCD TV manufacturing, to cut its dependence on notebook production where competition is cut-throat and profit margins poor.
Laptops comprised more than 90 percent of Compal’s total sales in the first half, but the percentage should drop below 90 percent in the fourth quarter, vice president Gary Lu (呂清雄) said.
Compal said it expects to ship at least 8 million LCD TVs next year, up from its projected shipments of 5.5 million to 5.7 million for this year.
As for Compal’s joint venture with South Korea’s LG Display Co, Chen said it would primarily focus on producing panels for use in notebooks, instead of TV modules as earlier speculated.
Last week, Compal announced an investment of US$7.35 million in a joint venture with LG Display in Kunshan in China’s Jiangsu Province.
The partners have tentatively set the capital for the new company at US$15 million, with Compal taking a 49 percent stake and LG Display the remainder.
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