Revenues up for Taiwan module makers
The top three memory module makers in Taiwan - A-Data Technology, Transcend and Power Quotient International (PQI) – all reported on-year revenue growth for 2005, with flash significantly contributing to their results. A-Data was the leader in terms of total revenue, on sales of NT$31.96 billion, as well as growth, as its revenues were up 22.1% from 2004. The company, which reported gross margins of 6.51% through the third over 7.7% in the fourth quarter. The contribution from flash rapidly climbed to almost 40% of its revenues by the end of the year up from only 10% early in the year. However, A-Data expects this ratio should remain steady in 2006. Transcend followed A-Data in terms of growth, with its sales increasing 13% to NT$16.4 billion. The company recorded gross margins of 13.2%. Flash accounted for about half of its overall revenues in and Transcend expects this ratio to persist in 2006. PQI reported its revenue grew 8% to NT$17.1 billion. Despite reporting a set back in earning per share during the second and third quarters, the company reported margins staying stable.
2nd-tier mobo makers looking for new products
Taiwan’s second-tier motherboard makers Albatron, Prolink, Epox and Walton Chaintech posted drops in each of their revenues for 2005, with only Biostar Microtech enjoying an on-year growth of 10.7%. Foxconn-affiliated graphics-card specialists Tul and Leadtek Research showed differing results for last year, with Tul having a decline of 21.3% while Leadtek a 9.9% increase.
In 2006, the companies are looking to develop new products to boost their performance. Albatron is scheduled to kick off volume shipments of its first PC based on Intel’s Viiv consumer PC platform in March. Prolink is gearing up to put more strength in TV turnercard sales, while Biostar may add a Viiv-based barebone system to its offerings. Walton Chaintech plans to market its first memory module by this quarter. Tul estimates it shipped 2.8 million graphics cards in 2005, down 30% from four million units in 2004. In contrast, Leadtek recorded full-year shipments of 2.5 million graphics cards, up 25%. For 2006, Tul plans to expand its product mix to include TV tuner cards, whereas Leadtek is seeking to grow its customer base for GPS and videophone products.
Mixed results 2nd-tier notebook makers
Of Taiwan’s second-tier notebook makers, Uniwill had the highest growth of 27.2% in 2005, followed by Arima with 18.2% and Mitac with 14.8%. In contrast, Clevo, First International Computer (FIC), and Twinhead experienced revenue drops.
Losing entry-level notebook orders from HP pushed Arima out of Taiwan’s top-five notebook ODM/first-tier notebook makers( Quanta, Compal Communications, Wistron, Asustek, Inventec) since 2003, with Asustek taking its place. Arima suffered revenue drops in 2003 and 2004, when the notebook maker to develop new product lines. Last year, Arima’s product mix of consumer electronics and optoelectronics drove its revenues up. Mitac enjoyed steady shipment growth for notebooks through consolidating its production capacities in China. In 2006, the company plans to expand its product mix to include network products, adding to its existing non-notebook segments such as LCD TVs and MP3 players. Due to from Korea-based Trigem, Twinhead suffered an on-year revenue slide of 28.2%. Twinhead will lower its notebook shipments to the notebook maker to 20% of its total shipments for this year, said the company.
Bluetooth to grow 50-70%
Shipments of Bluetooth chips will climb to 470-500 million in 2006, up 50-70% on year, according to investment banks in a Economic Daily News report. Rapidly growing sales of handsets and other portable devices prompted by falling IC and production costs are set to boost Bluetooth demand. Asian Information Technology has enjoyed strong Bluetooth IC shipments for Cambridge Silicon Radio (CSR) since 2005, through its subsidiary Apache Communication. Alltek Technology achieved about 80% growth, the company mainly distributes Bluetooth ICs for Broadcom. Foxlink shipped more than a million Bluetooth headsets last year, driven by Motorola’s orders. In 2006, the company likely will get a Bluetooth headset order from Sony Ericsson, which also places handset component orders with Merry Electronics. Cal-Comp Electronics, an subsidiary of Compal, has secured Bluetooth headset orders from Samsung, following a Motorola order.
Asustek to launch branded desktop
Asustek Computer, which currently has the top spot in the Taiwan notebook market, plans to launch a Asus branded desktop PC line in Taiwan in February, with the first model targeting the home-use segment. The company is also looking to develop its enterprise desktop PC segment, competing with rival Acer that recently formed a partnership with domestic channel players Unitech Electronics and Weblink International for enterprise desktop PC sales in Taiwan.
Dell moves assembly notebooks to Malaysia
Dell plans to assemble all of its notebooks in Malaysia in the future, according to Tan Say Peng, director of Dell South Asia, speaking at the opening of the company’s fifth global Enterprise Command Center (ECC) in Penang, Malaysia. Currently, 95% of Dell’s notebooks are assembled in Penang, Malaysia, with the remainder in Ireland, he said. Tan Sri Koh Tsu Koon, chief of Penang, indicated that Dell’s export value from Penang accounted for 30% of the overall electronics-related export value from Malaysia in 2005. Also, the company contributed 10% (around US$28 billion) of Malaysia’s total exports. Currently, Dell’s Penang production base houses five notebook assembly lines, one desktop PC line and one server line. The plant area is 240,000 square meters. Around a million base units are dispatched from Shanghai each month for assembly in Penang. The base units are produced by Taiwan manufacturers.
Dell has six production bases globally in Xiamen (China), Ireland, Brazil, Tennessee (US), Austin (Texas, US) and Penang. The Penang plant was established 11 years ago. It takes around 4-5 days for Dell to ship products from Penang to its global customers, according to Dell.
Foxconn: 40 million mobo’s
Foxconn Electronics is estimated to have shipped 40 million motherboards in 2005, rising from 30 million units in 2004, market sources suggested. The Taiwan-based company has raised its competitiveness against first-tier motherboard makers Asustek, ECS, Gigabyte Technology and Micro-Star International (MSI).
In 2005, from Asus, ECS, Gigabyte, and MSI totaled 104.86 million units. Asus led with about 52 million units, followed by ECS with 20 million, MSI with 18 million and Gigabyte with 16.5 million. MSI revised its motherboard shipments from an estimate of 16.7 million units to 18 million, according to the company.
Facing a threat from Foxconn, Asus intends to lower the proportion of its motherboard business to its overall operations to less than 30% this year by targeting the barebone and PC business, the company indicated. ECS is looking to develop its PC assembly business this year through its of Tatung’s desktop PC unit. MSI contributions from its notebook business will grow significantly in 2006.
In addition to first-tier motherboard makers, second-tier players AOpen, Biostar, DFI, Epos Computer, Shuttle, Universal Scientific Industrial (USI), and Walton Chaintech are up to focus on non-motherboard businesses. Chaintech claimed that it will continue to produce motherboards this year, while its first memory module will be launched this quarter.
MSI and ECS bet on different notebook strategies
MSI aims to reap profits on strong own-brand notebook sales while ECS expects to focus on ODM business for notebooks this year, according to sources. MSI plans to ship 500,000-600,000 own-brand notebooks this year, with Napa-platform models to replace its Sonoma-platform ones this quarter, according to company chairman Joseph Hsu. MSI expects its notebook shipments to more than double this year. Napa-platform notebooks will account for nearly 80% of its notebook sales in the third quarter, up from 30% in the second quarter, Hsu said. MSI shipped around 250,000 notebooks last year, about the same number as BenQ. The company’s notebook business turned profitable on a monthly basis last April.
ECS will keep focusing on ODM business for notebooks. The company aims to ship 1.4-1.5 million notebooks this year, up from 700,000 last year, with the China market being the major region for its sales. In addition, ECS will also lower the proportion of sales coming from its notebooks from 30% of its total sales previously, to 20% this year, as it begins to offer desktop PCs in its product line.
Enhanced LCD TV panels to squeeze CRT
Improved brightness and contrast ratios for TFT LCD TV panels will add pressure on color CRT technology, AU Optronics (AUO) said. The brightness of LCD TVs will rise to 600 nits, up from 500 nits last year, while the contrast ratio will go up to 1200:1, compared to 800-1000:1 in the past. In addition, LCD TVs now have 4ms response times, the same as CRT TVs, making LCD technology even more attractive, according to the panel maker.
WD launches 2.5-inch 120 GB EIDA/SATA notebook drive
Western Digital on January 26 in the US introduced its next-generation WD Scorpio mobile hard drives. Now available in capacities up to 120 GB, the latest model WD Scorpio drives are equipped with either EIDE or Serial ATA (SATA) interfaces. Offering a 5,400 rpm spin speed, the company claims that the Scorpio operates with power requirements comparable to 4,200 rpm drives. It also claims technological advancements that provide optimized acoustics for quiet operation. The hard drive has a 12ms seek time and up to 8MB cache.
The latest addition joins 40, 60, 80 and 100GB models in the Scorpio family and the company claims that this enables them to address greater than 95% of the notebook PC market in calendar year 2006. According to research firm TrendFOCUS, the 2.5-inch hard drive market is growing rapidly with unit shipments forecast to expand to 81.7 million units in 2006, up 19.1% from 68.6 million units in 2005. The compound annual growth rate (CAGR) for 2.5-inch hard drives is estimated to be 19.3% from 2006 through 2009. ‘WD is addressing this large market by building on our reputation for producing high quality and high reliability hard drives,’ said Jody Bradshaw, general manager of mobile storage. ‘The new WD Scorpio 120GB drive delivers the performance and exclusive features that translate into meaningful end-user benefits.’ WD indicated that the WD Scorpio 120 GB EIDE (model WD1200VE) hard drives are currently shipping in volume and are available on the company’s online store for US$234.99, where customers can currently take advantage of free standard shipping on orders over US$200.
Unfortunately, a visit to the website reveals that the free shipping is limited to standard UPS Ground shipping not valid for addresses in Hawaii or Alaska and the company does not ship to PO, APO and international addresses at this time. The WD Scorpio 120GB SATA (model WD1200BEVS) is scheduled to begin shipping next month.