Contract electronics manufacturer Inventec Corp’s (英業達) growth momentum in notebook computer and server shipments is forecast to slide next year, due to lower growth in major products, SinoPac Securities Investment Service Corp (永豐投顧) said on Monday last week in a research note.
Moreover, a front-loading of orders by brand cusomers last quarter to avoid paying US tariffs has led SinoPac to adopt a conservative outlook on Inventec’s business in the final quarter of this year, the equity consultant said.
“The company’s notebook computer and server shipments are likely to show annual declines of 2.3 percent and 5.7 percent respectively next year,” SinoPac analyst Jacky Wang (王嘉籐) said.
Inventec is one of the world’s leading contract notebook computer manufacturers, competing against Quanta Computer Inc (廣達), Compal Electronics Inc (仁寶), Wistron Corp (緯創), Pegatron Corp (和碩) and Hon Hai Precision Industry Co (鴻海精密).
Notebook computers accounted for 45 percent of the company’s total revenue in the first half of this year, while server products made up 38 percent, mobile devices — smartphones, smart wristbands, wireless earphones and smart speakers — made up 15 percent and solar power products about 2 percent, SinoPac tallies showed.
With the peak season arriving and customers requesting advanced shipping, the third quarter likely saw Inventec shipments increase to as many as 5.04 million notebook computers and 690,000 servers, while handset shipments were estimated to increase 20 percent from the previous quarter thanks to new product launches by Apple Inc and Xiaomi Corp (小米), Wang said.
This quarter, notebook shipments could decrease 2 percent quarter-on-quarter to 4.9 million units due to a shortage of Intel Corp processors, while server shipments might decline to 570,000 units due to the US-China trade dispute, Wang said.
Handset shipments for this quarter are expected to stay flat from last quarter due to weakening handset demand in China and Apple’s iPhone sales, he said.
Inventec reported record-high consolidated revenue of NT$141.07 billion (US$4.56 billion) in the July-to-September quarter, up 12 percent from the same period last year, while total revenue expanded 11.33 percent year-on-year to NT$372.78 billion.
The company is expected to shift some server assembly lines from China to plants in Taiwan and Mexico next month in response to US-China trade tensions, Wang said.
SinoPac forecast that Inventec’s server shipments would decrease 5.7 percent to 2.33 million units next year from 2.47 million units this year, and notebook shipments would drop 2.3 percent to 18.25 million units from 18.7 million units.
“With limited growth in major products, we are conservative about Inventec’s operations next year,” Wang said.
Although falling 4.84 percent in the past month, shares in Inventec rose 3.36 percent to close at NT$24.6 in Taipei trading on Friday, outperforming the TAIEX overall, which advanced 2.44 percent, Taiwan Stock Exchange data showed.
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