(Japanese Site)
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| PC Peripheral Sector Expects Better Q2 Performance
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April 27, 1998 (TAIPEI) -- Manufacturers of computer peripheral equipment in Taiwan said they expect their
businesses to improve in the second quarter of this year.
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The market in March has fully digested bearish factors, such as the drop in earnings around the time of the
CeBit computer trade show and the wait-and-see attitude prior to the debut of Intel Corp.'s low-priced
Celeron chips, they said.
Personal computer sales were lackluster in the first quarter.
Intel and Motorola Inc. both witnessed shrinking earnings, while Compaq Computer Corp. suffered rising
inventories.
Because those companies have been busy clearing out inventories, Taiwan-based computer component suppliers
and original equipment manufacturers (OEMs) saw a drop in orders from abroad. And many computer buyers have
taken a wait-and-see attitude, expecting that computer prices will fall further after Celeron's introduction.
Price cuts offered during the CeBit trade show helped boost the production of companies that make computer
components and peripheral equipment. But, at the same time, the earnings of such companies have registered
much smaller growth, and many computer peripheral makers even saw their earnings fall in March.
An executive at First International Computer Inc., motherboard OEM firm, said that prospects of the computer
market in the second quarter are no worse than in the first quarter. Profit margins in the industry are still
hard to predict, because many market uncertainties exist, he added.
The wait-and-see attitude among buyers is likely to end after Celeron chips appears in the market, said a
spokesman at Song Cheer Computer Co., Ltd., a major computer case maker.
Makers of computer cases are expected to see a rise in operating revenues in May, when products designed for
the MicroATX standards in the Celeron lineup start reaching the market.
Local printed circuit board (PCB) companies say that prospects for second quarter production appear good, but
they add that over-supply may reduce suppliers' rates of earnings.
Price cuts are now common in the industry, because existing PCB makers are expanding operations amid the
entry of many newcomers.
(Commercial Times, Taiwan)
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