Monday, July 25, 2011

Increasing back-to-school demand to boost PC and e-book reader sales

Sales of notebook, desktop and e-book readers, which are targeting education and document processing purposes, will have a chance to see a significant growth in the third quarter as demand for the back-to-school period, which usual starts from mid-July to mid-September in Europe and the US, has already started to appear, according to sources from PC players.

Several channel retailers in the US and Europe such as Amazon and BestBuy, have already started promotions for back-to-school shopping with products such as notebooks, desktops, e-book readers, printers and tablet PCs the major promotional items.

With e-book reader sales continuing to grow in the US and Europe, the global e-book reader market is expected to reach a scale of 20-30 million units in 2011, and as the largest e-paper supplier E-Ink expanded its capacity for the second half more than 1.5 fold that in the first half, strong demand from the back-to-school season will allow the e-book reader industry to be able to compete against the tablet PC market, the sources added.

Server platforms to become major battlefield between Intel and AMD

Observing from Intel and AMD's second-quarter results, growth from the traditional PC market has already weakened, while their server businesses, benefiting from the quick rise of cloud computing, are expected to become the major battlefield between the two firms in the future, according to sources from PC players.

Intel is performing rather strongly and achieved strong results in the second quarter from its Data Center Group, while AMD is set to challenge Intel with its upcoming server CPU architecture, Bulldozer, which will start shipping later in the third quarter, the sources noted.

Although Intel currently has about 80% share of the global server platform market, with AMD's upcoming new CPU architecture expected to significantly boost its price/performance ratio, the new CPUs should provide AMD a great chance to compete against Intel in the second half of 2011.

TSMC regaining more orders from chipset players

Taiwan Semiconductor Manufacturing Company (TSMC) has managed to regain more orders recently, aiming at sustaining a positive on-quarter growth in revenues for the third quarter, according to industry sources.

Foreign investors have recently reduced their share holdings in TSMC, expecting the foundry house to post negative growth in third-quarter revenues as its chipset clients have recently reduced some of their wafer starts due to inventory adjustments, the sources noted.

Recent financial results released by international chipset players also indicated that Nvidia, AMD, Broadcom and Qualcomm are all positive about their business outlook for the second half of 2011 after posting strong gains in the second quarter, said the sources, noting that TSMC's business is expected to move upward with those chipset players.

A positive on-quarter growth in the third quarter will also help TSMC to sustain its goal of achieving a 20% growth in revenues set for 2011, commented the sources.

Saturday, July 23, 2011

Nokia drops to third position in global smartphone ranking in 2Q11

Nokia may see its ranking in the global smartphone market drop from the number one position to third place in the second quarter of 2011 after the vendor reported its smartphone shipments declined 31% sequentially and 34% on year to 16.7 million units for the quarter, according to industry sources.

Apple has announced that it shipped 20.34 million smartphones in its fiscal 2011 third quarter which ended June 25, 2011. The shipments will allow Apple to take up an over 20% of the global smartphone market for the Aprpil-June period, the sources noted.

Samsung has yet to announce its results for the second quarter, but industry watchers project that Samsung's second-quarter smartphone shipments should reach 19-20 million units, trailing after Apple but ahead of Nokia.

Although Nokia did launched a number of new models based on Symbian platform in the second quarter, Nokia's sales and market share continued to drop sharply during the quarter, indicating that Symbian has lost its appeal to consumers, commented the sources.

HTC shipped 11.5 million smartphones in the second quarter, trailing after RIM to serve as the fifth-ranked vendor in the segment. However, HTC is expected to see its shipments increase 10-15% sequentially to 13-13.5 million units in the third quarter, which could further boost its ranking, indicated the sources.

China market: HTC launches social network smartphone with Sina

HTC has launched a customized version of its social network smartphone, the HTC Salsa, in the China market in cooperation with the local Internet company Sina, catering to users of Sina's Weibo microblogging services, according to the companies.

Given that the popularity of Weibo in China is much higher than that of Facebook, HTC has decided to cooperate with Sina to launch its social network smartphones so as to ramp up its penetration rate in the mid-range smartphone segment in China, commented industry sources.

The Weibo smartphone, the Weike (transliterated from Chinese), has a 3.4-inch HVGA touchsreen, 800MHz processor and a 5-megapixel camera, and also features a special button for easy access to Weibo.

Efun selects Applied Materials system for production of touch screen films

Taiwan-based Efun Technology, a manufacturer of critical components for touch screens, LCD monitors and backlight modules, has started to produce flexible substrates coated with indium tin oxide (ITO) films for touch panel screens. The ITO films were deposited using a SmartWeb system from Applied Materials, according to the equipment supplier.

This is the second SmartWeb system Efun has purchased from Applied for manufacturing its ITO touch panel components, the equipment maker indicated. The first system has been in production at Efun since 2009.

Applied's SmartWeb system is a roll-to-roll vacuum coater that uses physical vapor deposition technology to deposit the ITO-based multi-layer film stack required for fabricating the most advanced touch panels used in tablet PCs and other mobile devices, the company said.

"The latest generation of tablet PCs features 7-inch and larger projective capacitive touch screens, sizes that demand the highest quality and performance from the ITO substrate. Applied Materials was able to meet our technical specifications and aggressive timeline, providing the technology to meet our customers' requirements for high-end touch panels at a price that enables them to successfully compete in a demanding consumer market," said Kuang-Rong Lee, vice general manager, optoelectronics business unit leader, at Efun.

Intel reports fifth consecutive quarter of record revenues

Intel has reported its fifth consecutive quarter of record revenues, with double-digit revenue growth across all business segments.

On a non-GAAP basis, revenues were US$13.1 billion, operating income was US$4.2 billion, net income was US$3.2 billion, and EPS was US$0.59. On a GAAP basis, the company reported second-quarter revenues of US$13 billion, operating income of US$3.9 billion, net income of US$3 billion, and EPS of US$0.54.

The company generated approximately US$4 billion in cash from operations, paid cash dividends of US$961 million, and used US$2 billion to repurchase 93 million shares of common stock.

"We achieved a significant new milestone in the second quarter, surpassing US$13 billion in revenues for the first time," said Paul Otellini, Intel president and CEO. "Strong corporate demand for our most advanced technology, the surge of mobile devices and Internet traffic fueling data center growth, and the rapid rise of computing in emerging markets drove record results. Intel's 23% revenue growth in the first half and our increasing confidence in the second half of 2011 position us to grow annual revenues in the mid-20% range."

In the second quarter, Intel's PC Client Group revenues up 11% on year, while Data Center Group revenues were up 15% on year, Other Intel architecture group revenues were up 84% on year, including Embedded and Communications Group revenues, which is up 25% on year.

Intel Atom microprocessor and chipset revenues reached US$352 million, down 15% on-year.

The acquisitions of McAfee and Infineon Wireless Solutions (now Intel Mobile Communications) contributed revenues of US$1 billion in their first full-quarter of results with gross margin reached 61%, consistent with the company's expectation.

AMD sees profit in 2Q11

AMD has announced revenues for the second quarter of 2011 of US$1.57 billion, net income of US$61 million, or US$0.08 per share, and operating income of US$105 million. The company reported non-GAAP net income of US$70 million, or US$0.09 per share, and non-GAAP operating income of US$114 million.

In the second quarter, the company had a gross margin of 46% with its computing solutions segment revenues staying flat both sequentially and on-year. Sequentially, higher mobile processor revenues were offset by lower desktop and server revenues, while the on-year decrease was primarily driven by lower server revenues.

Meanwhile, graphics segment revenues decreased 11% sequentially and 17% on year. The sequential decrease was driven primarily by lower discrete mobile shipments and seasonality in the desktop discrete graphics add-in board market. The annual decrease was primarily driven by lower shipments.

For the third quarter, AMD expects revenues to increase 10%, plus or minus 2pp, sequentially.

MediaTek launches 4-in-1 chip targeting smartphones, tablets

MediaTek has rolled out a new 4-in-1 SoC solution designed for smartphones, tablet PCs and portable electronics devices. Dubbed MT6620, the solution integrates 802.11n Wi-Fi, Bluetooth 4.0+HS, GPS and FM transmitter/receiver on a single chip.

MediaTek said it is now shipping the new solutions to leading customers in sizable quantities.

MediaTek is believed to be one of the two in the industry to offer 11n/Bluetooth/GPS/FM combo chips for mobile technology devices, industry sources have claimed. A similar solution from Qualcomm is still in the development stage, the sources said.

The MT6620 is being identified as MediaTek's killer product, the sources indicated. The 4-in-1 SoC solution is able to save end device manufacturers at least US$2-3 in production costs compared to single chips integrating two to three functions, the sources said.

MediaTek chairman Tsai Ming-kai previously remarked that basic demand for current hot-selling items including tablet PCs and smartphones would remain in the third quarter, responding to speculation that the third quarter of 2011 is unlikely to enjoy peak season effects as seen in past years.

MediaTek saw its revenues grow 5.5% sequentially to NT$2.1 billion (US$72.7 million) in the second quarter, meeting the lower end of its NT$20.9-22.3 billion guidance range. Market observers expect the company's revenues to enjoy 15-20% sequential growth in the third quarter, citing brisk sales of its "value-added" 2.5G chipset solutions in emerging markets.

MediaTek is scheduled to hold an investors meeting on July 27 to discuss its performance in the second quarter, and provide its guidance for the third quarter.

Wednesday, July 20, 2011

Intel to launch new Celeron processors in September

Intel is set to launch several new Celeron processors for both desktops and notebooks in September, and will gradually phase out some existing Celeron models.

Intel will launch dual-core Celeron G540 (2.5GHz) and G530 (2.4GHz), and single-core Celeron G440 (1.6GHz) processors for desktop PCs with prices at US$52, US$42 and US$37 in thousand-unit tray quantities, respectively, and will gradually phase out six existing Celeron processors including E3500 and 450.

For notebook platforms, Intel will launch dual-core Celeron B840 and B800, and single-core Celeron B710 as well as an ultra-low-voltage single-core Celeron 787 processors with prices at US$86, US$86, US$70 and US$107.

For netbooks, Intel is set to launch dual-core Atom N2800 and N2600 CPUs with prices at US$47 and US$42, while for nettops, Intel will offer dual-core Atom D2700 and D2500 CPUs with prices at US$52 and US$42.

Although market watchers originally expected Intel to phase out its Celeron series processors due overlap with its Atom series processors, Intel, in the end, decided to use Celeron to guard its entry-level PC business and defend the assault from AMD's new entry-level APUs.

Google, Intel set to upgrade Chromebook performance

Google plans to upgrade the Chromebook design from originally adopting Atom N570 processors to mainstream Core i series processors to significantly boost system performance, while strengthening the machine's security. The plan has already received support from Intel with the company giving a 10-20% discount for related processor quotes, according to sources from notebook players.

In addition to Samsung and Acer, there are already several notebook vendors including Asustek Computer, already considering to join the upcoming Chromebook upgrade project and are set to launch related products after the fourth quarter, the sources noted.

The sources pointed out that despite the 12-inch Chromebook is mainly being pushed for its cloud computing capability, with most work being done by the back-end servers, since their hardware specifications are the same as a netbook, while being US$50-100 more expensive than a Windows 7-based netbook, and having an unattractive industrial design, the overall price/performance ratio is disappointing.

Therefore, Google has recently started notifying its partners that Chrome OS already has an obvious upgrade path for its hardware specifications and related security, while the company is also providing assistance with marketing and is aiming to push the product's price range to above US$500 and increase its attractiveness in the market.

However, some notebook vendors believe Android's success in smartphones and tablet PCs does not guarantee the success of Chromebook, and Microsoft still has an un-touchable position in the PC industry. Since most consumers are already used to Windows, while Windows has great software compatibility, if Chromebooks cannot outmatch Windows products on pricing, while maintaining standard performance demands, consumers are unlikely to accept a brand new operating system in the short term.

Tuesday, July 19, 2011

ARM to have big slice of notebook market in 2015, says IHS

After more than 30 years of domination by a single microarchitecture - Intel's X86 - the PC microprocessor (MPU) market finally is set for some real competition with shipments of ARM processors set to soar in the coming years and projected to appear in nearly one out of every four notebook PCs made in 2015, according to IHS iSuppli.

Spurred by next year's introduction of Microsoft's new ARM-enabled Windows 8 OS, ARM-based systems will account for 22.9% of global notebook PC unit shipments in 2015, up from 3% in 2012, IHS said. Shipments will reach 74 million ARM notebooks in 2015, compared to 7.6 million in 2012.

"Starting in 1981, when IBM first created its original PC based on Intel's 8088 microprocessor, the X86 architecture has dominated the PC market," said Matthew Wilkins, principal analyst of compute platforms for IHS. "Over the next generation, billions of PCs were shipped based on X86 microprocessors supplied by Intel and assorted rivals - mainly Advanced Micro Devices (AMD). However, the days of X86's unchallenged domination are coming to an end as Windows 8 opens the door for the use of the ARM processor, which already has achieved enormous popularity in the mobile phone and tablet worlds."

To be introduced in 2012, Windows 8 is expected to support ARM-based PC systems in some versions. Microsoft at the Consumer Electronics Show (CES) in January announced that Windows 8 would work with ARM-based system on chip (SoC) designs, whereas the company's flagship OS has supported only standalone X86 microprocessors in the past. ARM support will enable the full-fledged Windows PC OS to work on highly integrated chips that are more space- and power-efficient than traditional X86 microprocessors, such as the ARM devices used in smartphones and media tablets.

ARM during the next few years is expected to achieve its biggest successes in the value notebook segment, IHS believes. Typically priced at less than US$700, value notebooks are designed to deliver the optimal price/performance to consumers. A category that includes netbooks, value notebooks most frequently employ AMD's E Series and Intel's Celeron M and Atom microprocessors.

"ARM is well-suited for value notebooks, where performance isn't a key criterion for buyers," Wilkins said. "Value notebook buyers are looking for basic systems that balance an affordable price with reasonable performance. ARM processors deliver acceptable performance at a very low cost, along with unrivaled power efficiency."

The proliferation of ARM-based notebooks is expected to provide growth opportunities for a raft of existing as well as new suppliers of the chip, including Nvidia, Qualcomm and Texas Instruments (TI).

However, Intel and AMD are not expected to cede a portion of their market without a fight, IHS said. For example, Intel is developing its tri-gate 3D transistor technology, which allows X86 microprocessors to cut their power consumption in half while still delivering the same level of performance. This potentially will help Intel to maintain its position in PC processors, but also may allow it to expand its X86 business into tablets and cellphones. Likewise, AMD has been working to reduce power consumption for its X86 devices.

Acer, HP undergoing management reshuffle

Acer, on July 18, announced it has recruited Dave Chan, former Hewlett-Packard (HP) China vice president, as general manager of its Touch Business Group in China. Also, while company corporate vice president of marketing and brand Gianpiero Morbello will also reportedly resign from his position, with Acer's vice president Scott Lin to take over, Acer commented that it has no idea about where such a rumor came from.

Sources from PC players pointed out that the power of Acer's former CEO Gianfranco Lanci is gradually being phased out and the new team is aggressive recruiting talent to start over. High Tech Computer (HTC) former innovation design officer will reportedly join Acer's team, but the rumor was not confirmed.

For HP, due to HP's bad quality notebook issues in March 2010, HP China had already implemented a large personnel reshuffle of its high-end executives with Chan, who was employed by HP China for 16 years, resigning from HP in June.

Acer President, Jim Wong said at the company's announcement that "Touch mobile device is Acer's new strategic business. While China's huge IT market, with unique applications and customer segment, presents great business potential. To address these specific needs, we established a separate business group overseeing the China touch mobile device market and will allocate the needed human resource."

"Dave will lead Acer's touch business development team in China," continued Wong, "cooperate with local telcos and operators on R&D, software, sales and services. His joining ensures that Acer has substantial leadership to steer this new business forward in China."

Earlier, HP, on July 11, also announced it will transfer vice president of Personal System Group in America region Stephen DeWitt to president of global webOS business, while former CEO of Palm Jon Rubinstein will work as senior vice president.

Monday, July 18, 2011

Google to release Android 3.2 soon

Google is expected to release its Android 3.2 OS to production partners at the end of July or early August, according to industry sources. Asustek has indicated it will launch Android 3.2-based tablets soon, while Huawei Technologies also said it will roll out a 7-inch Android 3.2 tablet in the third quarter.

The Android 3.2 will improve the compatibility of Android-based applications, hardware acceleration capabilities and upgrade functions including Movie Studio, Movies, Music and Widget, while also optimizing Qualcomm's Snapdragon CPUs, indicated the sources.

In addition to Asustek's Eee Pad MeMO 3D tablet PCs, new tablet PCs to hit the market in the second half will include the 7-inch Iconia Tab A100 from Acer and the 7-inch MediaPad from Huawei, while HTC may upgrade its Android 2.3 HTC Flyer to Android 3.2, the sources added.

Asustek Transformer shipments top 400,000 units a month

Monthly shipments of Eee Pad Transformer tablet PCs from Asustek Computer have reached 400,000 units, making the company's goal to ship a total of two million tablet PCs in 2011 sustainable, according to sources at upstream panel suppliers.

Asustek's tablet shipments are expected to grow further in the third quarter, the sources said. The company has requested its touch panel providers supply a monthly target of 400,000-500,000 units during the quarter, the sources noted.

Asustek internally set a more aggressive goal for boosting its tablet shipments in 2011, the sources revealed. The company reportedly has placed contract orders of as high as 4-4.5 million units for the second half of the year, the sources indicated.

Asustek's tablets reportedly are assembled by Pegatron Technology.

In other news, Pegatron's June revenues grew 51.7% sequentially to NT$45.64 billion (US$1.58 billion), the highest since December 2009. Market watchers credited the significant on-month growth to strong sales of Asustek's Transformer devices.

Apple giveth, but iCloud taketh away from NAND flash market, says IHS

Apple in recent years has played a key role in expanding the market for NAND flash, but the company's newly-launched iCloud storage service could cause demand for the memory to weaken in the future, according to IHS iSuppli.

Driven by best-selling products like the iPad and iPhone, Apple is expected to remain the world's largest buyer of NAND flash memory in 2011 accounting for nearly 30% of global demand. Shipments of NAND flash memory for various Apple products are anticipated to reach 5.2 billion GB-equivalent units in 2011, out of a total global market of 18.5 billion GB-equivalent units. Apple's share of 28.3% represents the single largest block of NAND flash consumption by one company, IHS indicated.

Apple's portion will continue to climb during the following years, holding at 29% for the next two years, IHS said. Its share then will slide somewhat by 2015 but still will account for 23.9 billion GB-equivalent units, or one-quarter of overall industry NAND demand.

"Apple has contributed greatly to the growth of the NAND business in recent years," said Dee Nguyen, memory analyst at IHS. "However, the company's adoption of cloud storage could have significant implications because the fastest-growing segment of the NAND flash market lies in the storage component of convergent mobile devices like smartphones and tablets. And with Apple products like the iPhone and iPad accounting for a disproportionate share of NAND flash demand, any move among Apple users to offload storage to the company's iCloud service could mean a corresponding decrease in demand for physical NAND flash memory in the future."

For example, free storage of songs on iCloud theoretically would decrease the need for local storage on a PC, smartphone or tablet. If storage consumption decreased by 100GB per user – calculated at a rate of 4MB per song at Apple's stated cap of 25,000 songs of free storage – the combined effect from Apple's huge database of users could make a serious dent on NAND flash demand throughout the industry, IHS believes.

For the near and immediate term, however, the threat level to the NAND flash industry from cloud storage remains low, according to IHS. The most likely scenario for the time being is an increase in overall demand for NAND storage – cloud or local – with users continuing to utilize the physical storage on their personal devices.

A number of reasons support this view. For one, access to iCloud is currently available only through Wi-Fi, and with Wi-Fi not obtainable in all locations, users still will need to store content on their device to enjoy offline access. Moreover, recent high-profile security breaches at Sony, Sega, Nintendo and various government websites have focused renewed attention on data security in the public realm – likely making users more wary about storing content in centralized cloud locations.

A third factor, cost, also plays into the equation, IHS said. While a US$24.99 iTunes Match storage fee per year might be an attractive price to some, other consumers could balk at the idea of paying a yearly charge, compared to a one-time cash outlay in buying additional NAND flash memory for their device.

To be sure, consumers can overcome the cost factor, IHS said. But until issues surrounding data security can be adequately addressed – and more important, until Wi-Fi access becomes more widespread – the future for NAND flash memory remains relatively safe.

Monday, July 11, 2011

Digitimes Insight: Taiwan notebook shipments increase in 2Q11 thanks to Classmate PC

Taiwan-based notebook makers' combined shipments in the second quarter of 2011 reached 44.49 million units with a sequential increase of 8.5%, better than 5.6% growth of the same quarter a year ago. The shipment growth in the second quarter of 2011 was mainly due to the over one million units of Intel Classmate PCs ordered by Venezuela, while demand from the consumer notebook market remained low and Intel's defective chipsets incident, which caused delays in shipments of new notebook models, did not significantly benefit the notebook makers, according to Digitimes Research senior analyst Joanne Chien.

Japan's earthquake was originally expected to create bottlenecks in upstream component supplies, but it turned out that the impact was very limited with most vendors already capable of resolving the related issues.

Acer, among the notebook brand vendors, had the worst shipment performance. Comparing with other notebook brands, which all achieved shipment growths, Acer's notebook shipments dropped 5% sequentially in the second quarter due to its inventory issues. Acer's order volume in Taiwan's total notebook shipments in the second quarter dropped to only 15% and without counting volumes from netbooks, Acer's ranking in terms of orders to Taiwan notebook makers, dropped to fourth with Lenovo rising to second.

In addition to Classmate PC with over one million units of shipments, Apple's close to one million units of MacBook Air shipments, a growth of 300,000 units from the first quarter, also helped Taiwan makers' shipments in the second quarter. Apple's MacBook Airs, in the second quarter, accounted for 30% of Apple's total notebook shipments.

However, whether Intel Classmate PC's shipment growth indicates that netbook still have a chance to see shipment growth in emerging markets, and MacBook Air's popularity will help pick up the pace of development of Intel's Ultrabook concept will still need to wait until 2012 for further proof.

Asustek, Pegatron June revenues up

Taiwan-based vendor Asustek Computer generated non-consolidated revenues of NT$28.260 billion (US$978 million) for June, a 16-month high, while ODM Pegatron Technology's June consolidated revenues of NT$45.64 billion were a new monthly record, according to the companies.

HP to pioneer launching Ultrabook-concept notebooks, say sources

Hewlett-Packard (HP) is likely to pioneer all branded notebook vendors to launch Intel's Ultrabook-concept notebooks, even ahead of the planned release of the UX21 Ultrabook by Asustek Computer slated for September, according to sources at Taiwan-based suppliers for parts and components.

HP is expected to launch two, or more, models of Ultrabooks initially, using Intel's Ultra-thin Core i7-2677M (1.8GHz) and i7-2637M (1.7GHz) dual-core CPUs, said the sources, noting that HP will outsource production to Foxconn Electronics (Hon Hai Precision Industry) initially.

Foxconn reportedly has begun shipping the Ultrabooks to HP. However, HP and Foxconn both declined to comment.

Asustek's UX21 Ultrabooks are expected to come in with displays in 11.6- and 13-inch sizes, said the sources. Asustek is outsourcing the production of the UX21 Ultrabooks to Pegatron Technology.

Sunday, July 10, 2011

TSMC to lose Liang, says paper

Mong-Song Liang will resign from the faculty of National Tsinghua University (Hsinchu, northern Taiwan) at the end of July, and is ready for his new career at Korea-based Samsung Electronics, a Chinese-language Commercial Times report has claimed.

In an internal letter issued by Taiwan Semiconductor Manufacturing Company's (TSMC) R&D head Shang-yi Chiang, Chiang clearly pointed out that Liang has decided to join rival Samsung as its R&D VP, according to the report. TSMC also sent a notice to its employees saying that considering company competitiveness, TSMC does not wish to see any of its staff continue to have work-related exchanges with Liang, the report said.

Liang was formerly a senior director of R&D at TSMC's Advanced Modules Technology Division, and had worked for the foundry for about 17 years. Liang was one of the key figures assisting in TSMC's establishment of advanced process module development and traffic patterns.

Rumors have circulated since late 2009 that Samsung successfully headhunted Liang from TSMC. But so far, neither of the companies confirmed the rumors.

Rumors also spread previously that Liang might rejoin TSMC following the foundry's re-appointment of Shang-Yi Chiang as senior VP of R&D. Liang used to work under the management of Chiang.

Industry observers believe that Liang's work experience will help Samsung shorten the learning curve and solve yield issues. The leader in memory chip production reportedly is gearing up for a bigger share of the pure-play foundry pie.

Samsung recently announced it has qualified 28nm LP process with HKMG technology, and is ready for risk production. The company also introduced the addition of 28nm LPH HKMG targeted specifically at mobile device applications.

ZTE, Huawei, Lenovo monopolize China Mobile procurement of 10 million 3G handsets, says report

China-based vendors ZTE, Huawei Device and Lenovo have won China Mobile's latest procurement open bid to share the total supply volume of 10 million TD-SCDMA 3G handsets priced at about CNY1,000 (US$152), with no international vendors winning supply contracts, according to a report by the China-based National Business Daily.

TSMC 2Q11 sales meet guidance

Taiwan Semiconductor Manufacturing Company (TSMC) has reported NT$36.67 billion (US$1.28 billion) in consolidated revenues for June 2011, down 0.1% on month but up 0.9% on year. The foundry's second-quarter consolidated revenues amounted to NT$110.51 billion, which came within the company's guidance range of NT$109-111 billion.

TSMC's cumulative 2011 revenues through June totaled NT$215.89 billion, up 9.5% from a year ago.

Fellow foundry house United Microelectronics Corporation (UMC) collected NT$9.19 billion in revenues in June 2011, down 2.3% on month and 11% on year. Revenues for the second quarter were NT$28.15 billion, representing almost flat growth compared to the NT$28.12 billion posted in the prior quarter.

UMC previously estimated that shipments and ASP for the second quarter would stay flat sequentially. It did not provide guidance for revenues.

TSMC is scheduled to hold its quarterly investors meeting on July 28 followed by UMC's on August 3.

Nvidia delays 28nm and 22/20nm GPUs to 2012 and 2014

Despite Nvidia CEO Huang Jen-hsun previously saying that the company is set to announce its new 28nm GPU architecture at the end of 2011 and 22/20nm in 2013, sources from graphics card makers have pointed out that Nvidia has already adjusted its roadmap and delayed 28nm Kepler and 22/20nm Maxwell to 2012 and 2014.

The sources believe that the delay is due to unsatisfactory yield rates of Taiwan Semiconductor Manufacturing Company's (TSMC) 28nm process as well as lower-than-expected performance of Kepler.

TSMC originally expected its 28nm capacity at Fab15 to be available in the fourth quarter of 2011 and was set to start pilot production for its 20nm process technology in the third quarter of 2012.

However, TSMC's other major client Qualcomm, currently, still has not yet adjusted its 28nm process schedule and is set to launch three new products, 8960. 8270 and 8260A using dual-core Krait architecture in the fourth quarter of 2011.

Meanwhile, AMD will follow its original schedule and enter the 28nm era in the first half of 2012. The company's next-generation graphics chips Southern Island as well as Krishna and Wichita processors, which will replace the existing Ontraio and Zacate processors, and will all adopt a 28nm process from TSMC.

ViewSonic to launch 7-inch tablet running on Google Honeycomb OS

ViewSonic plans to launch the world's first 7-inch tablet PC running on Google Honeycomb OS soon. The 7-inch tablet will be powered by a dual-core Tegra CPU with a display solution of 1024 by 600 and support Wi-Fi technology initially.

The company pointed out that Google is currently working on optimizing its Android Market applications to allow them to better fit onto 10.1-inch tablet PCs, and is also working on resolving some issues with Android's compatibility on 7-inch tablet PCs. If Google is able to resolve the issues before the end of July, when the Taipei Computer Application Show will start, ViewSonic plans to start selling its 7-inch device at the show, and if not, the company will push pre-orders.

ViewSonic pointed out that smartphones have a high market penetration rate in Taiwan and any smartphone with Android 2.2 or above can be used as a wireless router for tablet PCs to connect to the Internet; therefore, the company will initially only push Wi-Fi support for its 7-inch tablet PC.

In consideration of markets such as India or Indonesia, which do not have a strong Wi-Fi environment as in Taiwan, ViewSonic, in the near future, will also launch 3G models to better serve these markets, the company noted.

Tuesday, July 5, 2011

PND demand growing in Asia, falling in Europe, North America

les volume of GPS PNDs (portable navigation devices) in the Europe market and that in the North American market in 2011 will decline by 10% and 30% respectively from 2010, but demand in the Asian market will grow considerably, according to industry sources in Taiwan.

The decreasing demand in Europe and North America is mainly due to replacement of GPS PNDs with smartphones, the sources explained. The global sales volume was estimated to drop from 45 million GPS PNDs in 2008 to 40 million units in 2010 and forecast to further slip to 35 million units in 2011, the sources pointed out.

The sales volume in the Asian market, although accounting for only over 10% of the global total, is on the rise, the sources indicated. In the China market particularly, there will be demand for 2.5-3.0 million GPS PNDs in 2011, the sources noted.

Unlike homogeneous markets in Europe and North America, markets in Asia are relatively unique and vary from one country to another, the sources pointed out.

Pegatron receives orders for 15 million iPhone 5s from Apple

Taiwan-based notebook maker Pegatron Technology is estimated to have landed orders for 15 million iPhone 5s (iPhone 4S) from Apple and is set to start shipping in September of 2011, according to sources from upstream component makers. In response, Pegatron declined to comment about its cooperation with clients.

Due to its cooperation with Apple for iPhone 4, Pegatron, in 2010, significantly expanded its plants, human power and equipment aiming satisfy the orders for 10 million CDMA iPhone 4s; however, since the Apple's CDMA iPhone 4 sales were lower than expected in the first quarter of 2011, Pegatron shipped less than four million CDMA iPhone 4s, causing the company's utilization rate to drop to only 50% with its gross margin also drop to 1.8% in the quarter.

The sources pointed out that as the iPhone 5, which does not seem to have any major update from iPhone 4, is already set for shipment in September, they are already started supplying components to Pegatron with Pegatron's plants in Shanghai, China also recently started hiring for manpower.

In addition to the iPhone, Pegatron has also been aggressive striving for iPad or Macbook orders from Apple, but due to the products' existing makers are defending their orders, Pegatron currently still has not yet achieved any progress. However, under the consideration of separating risks, some market watchers believe Pegatron will have chance to land a small volume of iPad orders in 2012.

Losing notebook orders from its major client Asustek Computer, Pegatron is currently working aggressively to land notebook orders from Acer with market watchers estimated that Pegatron will be able to land orders for more than six million notebooks in the second half of 2012, up from the two million units, currently.

As for dropping PS3 shipments, Although Sony already released information about PS4, the sources is still conservative about the new gaming console's shipments as the gaming market has recently been impacted strongly by online devices such as tablet PCs

Acer, Asustek turn marketing focus to China market in 2H11

Acer's notebook inventory clearance bringing a drop to mid-range and entry-level notebook models' average selling price in Europe by 40-50 euro, causing the Europe PC market to fall into price competition, so both Acer and Asustek Computer have decided to move their marketing focus to China in the second half of 2011, according to sources from notebook players.

The sources pointed out that Acer's inventory clearance not only impacted Acer's profitability, it also caused Acer's competitors to all follow suit and cut their notebook price to maintain market share. Since notebook players are selling their older notebook models with low prices in Europe to counter Acer, demand for higher priced new notebook models is relatively weaker.

With the notebook market in the US is facing an impact from the tablet PC, and the market status rather uncertain, the sources believe the US notebook market is unlikely to present strong growth in the second half of 2011.

Currently, Asustek has a 15% share in the China notebook market,and Acer is aiming to increase its market share in China to 13-15% in 2011 and surpass Asustek.

Monday, July 4, 2011

Notebook vendors take back chassis purchasing rights from ODMs

Global first-tier notebook vendors Hewlett-Packard (HP), Acer, Dell and Asustek Computer have all recently retrieved back their purchasing rights for notebook chassis from their notebook manufacturing partners and are placing orders directly with chassis makers hoping to secure supply capacity, according to sources from PC players.

Because Intel is aiming to boost the penetration rate of its Ultrabook concept to 40% of the consumer notebook market, the notebook players are concerned that Intel's strategy may cause serious shortages in metal chassis supply, and therefore, have decided to take back related purchasing rights.

The sources pointed out that most of the notebook brand vendors still keep the purchasing rights for the seven key components of notebooks including panels, CPUs, hard drives and batteries, leaving purchasing choice of smaller components such as chassis, cooling modules and hinges, to the notebook makers. But as ultra-thin designs are becoming a new mainstream specification, vendors are returning the purchasing rights for notebook chassis to their own departments to ensure smooth supply in the future.

Sources from chassis makers also pointed out that the notebook vendors have turned aggressive in contacting them recently and are already placing orders for the first half of 2012 to secure supply capacity. Their actions also indicate that demand for metal chassis will increase significantly starting in the first quarter of 2012.

To fulfill demand, chassis maker Foxconn Technology, which currently only has about 9,000 CNC machines for producing metal chassis, is set to purchase 10,000 more CNC machines in the near future, to significantly boost its capacity, while the other major chassis maker Catcher Technology also plans to expand the number of its CNC machines to 13,000-15,000 by the end of 2011.

In addition to chassis makers, notebook makers including Quanta Computer, Compal Electronics, Wistron and Inventec are also working more aggressively on vertical integration in chassis production to increase profitability.

Intel paying handsomely to attract downstream vendors into launching Ultrabooks

Intel has recently started planning a new marketing strategy for its Ultrabook concept and has invested heavily into the related budget and resources hoping to attract first-tier notebook vendors into developing Ultrabooks, according to sources from downstream notebook players.

Due to the failure of Intel's Consumer Ultra Low Voltage-based (CULV-based) ultra-thin notebooks in 2009, while the notebook market has been severely impacted by tablet PCs, most notebook vendors are taking a conservative attitude toward Intel's Ultrabook concept and Intel is hoping its heavy investment will be able to attract these vendors to launch Ultrabook products, the sources noted.

Intel announced its Ultrabook concept in June with a goal of having 40% of the global consumers notebooks using its Ultrabook concept at the end of 2012. Asustek is already set to launch its first Ultrabook concept-based notebook, UX21, in September.

Although Intel is providing a significant budget to support its partners launching Ultrabooks, the Ultrabook CPUs' rather high prices are currently still affecting downstream vendors' willingness to adopt as vendors are still concerned whether the Ultrabook product's prices can reach as low as US$1,000 as claimed by Intel. Although the vendors have already started testing Ultrabooks, most of them are still conservative about opening projects for production.

Currently, most of the vendors are monitoring Asustek's performance with its UX21 and will cut into the market when the timing is appropriate.

For the Ultrabook product line, Intel has recently launched four dual-core CPUs and is set to launch a single-core Celeron 787 CPU in September and Celeron 857 in the fourth quarter to replace Celeron 847, the sources added.

Friday, July 1, 2011

Apple likely to dethrone HP as leading portable PC vendor

Apple is likely to replace Hewlett-Packard (HP) as the global number one notebook vendor in 2012 if tablet PCs are included in the calculation of global notebook shipments, according to industry sources.

Global shipments of tablet PCs are expected to top 60 million units in 2011 with shipments from Apple likely to total 40 million units for a 60% share. And now some market research firms have predicted global tablet shipments are to top 80 million units 2012 with iPads accounting for 60 million units.

Additionally, Apple is also likely to ship 15 million MacBooks in 2012, bringing its combined shipments of notebooks and tablets to a total of 75 million units, accounting for 25-30% of the global notebook market, the sources estimated.

HP shipped 40 million notebooks in 2010 and is expected to ship 45-50 million units in 2011, noted the sources, adding that HP will not be able to compete with Apple for the tops title in 2012 based on its performance in 2010 and 2011.

Thursday, June 30, 2011

Asustek optimistic about performance in China

Asustek Computer, at a product launch conference in China, pointed out that notebook demand in the China market was weak in the second quarter, but as the IT market will enter the peak season in the third quarter, demand is expected to rise, but inflation problems in China may still have some impact on demand, according to company CFO David Chang.

Asustek's share in China's notebook market in 2010 was about 13% and will reach 15% in 2011. After 2011, the company expects its market share will rise 1pp per year, Chang noted.

Although market watchers are turning conservative toward notebook demand in the second half, Chang pointed out that the company has no plans to reduce its shipment target. Asustek shipped about 5.9 million notebooks in the first half and should have no problem achieving its goal of shipping 14 million units in 2011. The company also shipped more than 400,000 tablet PCs in the first half and should be able to reach its goal of two million units for 2011.

After July, Asustek is set to launch its low-price Eee PC X101 netbook, pairing Intel's Atom 435 processor with MeeGo operating system for a price of US$199, while Windows 7 models will be priced at US$310-350. In September, Asustek will also launch netbooks using Intel's latest Cedar Trail-M platform with its annual netbook shipments target still set at six million units.

In September, Asustek will also launch its UX21 with two screen size options, 11.6-inch and 13-inch, using Intel's Ultrabook concept. Intel estimates that its Ultrabook concept will be adopted for 40% of global consumer notebooks at the end of 2012, with Asustek also estimating that its UX series will account for 3-5% of its total notebook shipments in 2012.

In additional news, Acer's action of dumping notebook inventory in Europe has already caused a drop of 5% in the ASP of notebooks in Europe and Acer is still able to maintain its lead with its strong push in volumes.

Acer reportedly planning to launch slide tablet PC in 4Q11

Acer reportedly plans to launch a slide tablet PC in the fourth quarter of 2011, targeting the year-end holiday season, according to sources from the upstream supply chain.

Acer's new slide tablet PC will adopt a 10-inch touch screen, ARM-based processor and will be manufactured by Compal Electronics, which declined to comment about its clients, noted the sources, adding that estimated shipments for the device are still not available as Acer is currently still in the middle of clearing its notebook inventory and is taking a conservative attitude toward its orders.

Acer has recently reduced its 2011 tablet PC shipment forecast from 5-7 million units to only 2.5-3 million units, and with more Android-based tablet PCs to start appearing in the second half of 2011, most of non-Apple tablet PC vendors' estimated shipments are overoptimistic, the sources added

Wednesday, June 29, 2011

Marvell TD-SCDMA single-chip solution adopted by ZTE for smartphones and tablet

Marvell has announced that the four new TD-SCDMA devices by ZTE, including two smartphones, a mobile tablet and a mobile hot spot device, all feature its TD-SCDMA single chip solutions designed to deliver high performance processing, dynamic multimedia for mobile TV, live video, 3D gaming and many exciting new mobile applications.

The ZTE Blade U880, one of the company's flagship smartphones, Light Tab T9, a 7-inch tablet and A6, a mobile hot spot device customized for TD-SCDMA networks, are powered by the Marvell PXA920, Marvell said. In addition, the sub-CNY1,000 (US$154.70) U802 smartphone is equipped with Marvell's PXA918.

"The ZTE launch is the latest validation of our long-standing strategy to make TD-SCDMA a world-class standard for very affordable smart devices," said Weili Dai, Marvell's co-founder, in a statement. "These exciting new products from ZTE demonstrate the performance advantages and versatility of Marvell's TD-SCDMA solutions and point to a growing momentum for the TD standard in China."

"ZTE aims to ship 12 million units this year, a goal that will make us one of the top three global tablet providers, one of the top five global providers of Android smartphones and the largest provider of smart devices in China," said He Shiyou, executive VP of ZTE, in the same statement.

Tuesday, June 28, 2011

Compal Communications smartphone shipments to be boosted by Nokia orders

Taiwan-based ODM maker Compal Communications shipped only 3.91 million smartphones in 2010 and has downward adjusted 2011 target shipment volume from 6.0 million smartphones to 4.5 million, but stands a chance of shipping 10-15 million smartphones through reliance on Nokia, according to industry sources in Taiwan.

Compal's shipments of Android, WebOS and Windows Phone 7 (WP7) smartphones to Nokia, Motorola, Hewlett-Packard (HP)and Acer in the first quarter of 2011 accounted for 70% of total shipments and 85% of total revenues, the sources indicated.

Compal has relatively strong R&D capabilities among Taiwan-based handset ODM makers as well as supporting resources from the Compal Group, but many ODM orders for smartphones are in too small volumes to reach an economy of scale, the sources said.

As Compal will begin shipping Mango (an update edition of WP7) smartphones to Nokia in the fourth quarter of 2011, Compal is likely to see a large increase in ODM orders from Nokia in 2012 if Mango smartphone models sell well in the global market and Nokia keeps downsizing its in-house R&D staff and strengthen ODM partnership with Compal, the sources analyzed. If so, Compal is expected to obtain orders for Mango smartphones from other vendors as well, such as Acer and LG Electronics, the sources indicated.

Compal has signed with Microsoft for licensed use of the Mango platform and Tango, a platform to succeed Mango, the sources noted.

Intel to continue working on MeeGo, despite Nokia exit

As Nokia's CEO Stephen Elop has recently confirmed that the company will quit its involvement in its co-developed MeeGo software platform with Intel, market watchers are becoming pessimistic toward MeeGo's future, but Intel, on the other hand, is set to continue working on MeeGo with plans already set through to the second quarter of 2012, according to market watchers.

In addition to netbooks and tablet PCs, Intel is ready to launch MeeGo v1.3 with support for smart TVs, car infotainment and multimedia handset devices in the fourth quarter and is set to launch v1.4 in the second quarter of 2012.

Intel will also launch a solution pairing its Atom processor with Google's latest Android system codenamed Ice Cream Sandwich in the first quarter of 2012, while the pairing with Windows 8 will come out as soon as the third quarter of 2012.

Intel has also been expanding its AppUp Center with over one million consumers already having downloaded applications from the store. IT players including Acer, India-based telecom carrier Reliance Communications, Indonesia-based telecom carrier SpeedUp, retailer Evernew, Malaysia-based retailer FOSA, and US-based retailers Awaken and Datavision have all recently announced they will join Intel's AppUp Center shortly.

White-box players supply close to 20% of global tablet PC shipments in 1Q11

White-box tablet PC players are rising quickly in the tablet PC industry with related shipments already accounting for close to 20% of global tablet PC shipments in the first quarter of 2011, according to sources from the upstream supply chain.

The sources pointed out that the white-box players are expanding quickly in emerging markets with their advantage in price. As they are showing an aggressive attitude for cutting into the tablet PC market, the sources believe their existence will become a big threat toward first-tier tablet PC players in the second half of the year.

The sources noted that white-box tablet PC players have been aggressively cutting into the North America market with several brands, such as Zenithink and Anhub, already having their tablet PC products listed under the top-20 besting selling products on Amazon.

Currently, most white-box tablet PCs are adopting 7-inch resistive touch screen panel with VIA Technologies' VIA8650 processor and the Android 2.2 operating system for a price as low as only NT$2,000 (US$69), compared to High Tech Computer's (HTC's) 7-inch Android 2.3-based Flyer tablet PC at NT$17,900. The large price gap allows the white-box models to attract demand from consumers.

Even for the white-box models using thin-film capacitive touch screens, the price only goes as high as NT$5,000, the sources noted.

There are already several Taiwan-based component suppliers aggressively competing in the new market; such as VIA Technologies for CPUs; Transtouch Technology, Emerging Display Technologies (EDT) and Mutto Optronics for touch panels; and First International Computer (FIC), Gigabyte Technology, Elitegroup Computer System (ECS) for assembly, the sources added.

Upstream touch screen IC suppliers such as Egalax-empia Technology (EETI) also plans to cut into white-box tablet PC market in the third quarter with MediaTek and Elan Microelectronics also set to hit the market.

However, since white-box players normally do not send their tablet PC for safety testing, the products can be easily damaged or have a defect, while their safety also raises concerns among consumers.

Acer reducing 3Q11 shipment forecast; company founder optimistic about inventory clearing progress

Upstream component suppliers of Acer have recently been notified by Acer to reduce their inventory preparation for the third quarter as Acer has reduced its notebook shipment forecast from originally 6.4 million units to 5.4 million units, indicating that Acer is still working on digesting its inventories, according to sources at upstream component players.

Commenting on the report, Acer founder Stan Shih pointed out that the company still need some times to get used to the state after the reorganization and he believes that Acer's executives are heading in the right direction. He also asked market watchers and investors to give Acer more time.

Although Acer has reduced its shipment forecast by about 15%, the sources pointed out that the reduced orders are mainly netbooks, accounting for about 80% of the volume.

The sources noted that Acer is expected to ship 1.45-1.5 million notebooks in July and 1.9-2 million units in August with shipments in September to drop only slightly from August, helping the company to complete its inventory clearing by the end of the third quarter.

In addition to the inventory, Acer is also adjusting its operation model from pushing volume to profitability. For netbooks, which is no longer a mainstream product in the IT market, the company will only maintain a certain shipment volume, but will turn its focus toward cloud computing.

Acer shipped a total of 800,000 tablet PCs from the launch of its tablet PC to the end of June, and its new 7-inch model will show up in the third quarter. Acer forecasts it will ship 800,000 tablet PCs in the third quarter, helping it to achieve annual shipments of 2.5-3 million units in 2011.

Monday, June 27, 2011

Asustek to start marketing Atom N435-based Eee PC X101 netbook in July

Asustek Computer will start marketing its low-priced netbook, the Eee PC X101, in July with models running on MeeGo available at US$199 and those running on Windows 7 available at US$310-350, according to industry sources.

The Eee PC X101 is powered by an Intel low-power Atom N435 1.33GHz single-core CPU, the sources noted.

Other branded notebook vendors including Acer, Lenovo and Samsung Electronics also plan to launch Atom N435/MeeGo-based netbooks soon, said the sources, noting that the Atom 435 netbooks released by Asustek and Acer will also support Intel's AppUp Center technology.

Compal lands Dell orders for 10 million business-use notebooks for 2012

aiwan-based ODM Compal Electronics has obtained orders for 10 million business-use notebooks to be delivered in 2012 from Dell, according to industry sources. Compal declined to comment.

Dell placed 2011 orders for 7-8 million business-use notebooks with Compal and 2-3 million units with Foxconn (Hon Hai Precision Industry), but has decided to shift 2012 orders from Foxconn to Compal, the sources said. Compal is expected to account for 90% of Dell's total shipments of business-use notebooks in 2012, the sources indicated.

Compal's main notebook ODM clients will be Acer, Dell, Lenovo and Toshiba, in 2012, the sources noted, adding orders released from Hewlett-Packard and Asustek Computer to Compal are expected to increase from 2011 levels.

Business-use models will be a main source of growth in global notebook demand in the second half of 2011, the sources said, adding Compal expects to ship 48 million notebooks, 3.8 million tablet PCs and eight million LCD TVs in 2011.

Chinesegamer to replace 2/2.5D online games with web games

Chinesegamer International, a developer/operator of online games in Taiwan, will replace 2D and 2.5D online games to be developed in the future with web versions based on cloud computing and concentrate operating resources on 3D online games, according to company president Leu Shyue-sen.

While users of online games have to download software and purchase in-game items to play, web games do not have this requirement, Leu said. Chinesegamer is developing technology to enhance audio and visuals and the performance of web games to make comparable with online games, Leu indicated. These are reasons for replacing 2D and 2.5D online games with web versions to make 2D and 2.5D games more accessible to entry-level players, Leu pointed out.

Chinesegamer will focus on 3D online games as its flagship product line, with web games and mobile games to be auxiliary lines, Leu indicated.

Orders for tablets to account for 3% of TSMC 2011 revenues, says paper

Orders for chips for tablet PCs are likely to contribute only a small percentage to Taiwan Semiconductor Manufacturing Company's (TSMC) consolidated revenues in 2011, and even 2012, the Chinese-language Commercial Times cited a Merrill Lynch analyst as reporting on June 24.

TSMC stands a good chance of winning orders for Apple's A6 processors, the paper quoted Dan Heyler, a semiconductor analyst with Merrill Lynch in Taipei, as indicating. But even if TSMC grabs all Apple's tablet chip orders for 2012, sales generated from the orders will account for only 2% of TSMC's overall sales for the year, Heyler was quoted as saying.

Orders for non-iPad tablet devices are expected to contribute only 3% to TSMC's consolidated revenues in 2011, and 4% in 2012, Heyler said, as cited by the paper.

Apple reportedly continues to contract Samsung Electronics to manufacture its A5 processors, using the foundry's 45nm process, the Commercial Times quoted industry sources as saying in a separate report. One thing for sure is that TSMC will not gain any orders from Apple in 2011, the paper observed.

Previous reports quoted industry estimates saying that orders for smartphones and tablets would generate sales of between US$900 million and US$1 billion in 2011, almost equal to the company's average revenues per month.

TSMC shares closed down 1.8% at NT$72.90 (US$2.52) on the Taiwan Stock Exchange (TSE) on June 24.

Asustek may have difficulty achieving shipments target for 2011, says paper

Asustek Computer, which estimated to ship 20 million notebooks and netbooks combined in 2011, may have difficulty achieving its goal since the company only shipped about 8.5 million units in the first half. Since the notebook industry is expected to only have a shipment proportion of 45:55 for the first and second halves of 2011, Asustek has internally admitted that achieving a shipment growth of 35% in the second half, will be a difficult challenge, according to a Chinese-language Commercial Times report citing sources from Asustek.

Asustek believes that the challenges are mainly coming from the Europe's bond crisis, which is affecting market demand, and Asustek is paying close attention to fluctuations of the euro and the affects on demand in the third quarter, added the paper.

Apple notebook upstream supply chain to run in full gear starting July

Makers in the upstream supply chain for Apple notebook products will run in full gear starting July preparing needed parts and components for the vendor's new MacBook Air models, according to sources in the supply chain. Apple is expected to take deliveries of over eight million MacBook Airs in the third quarter, nearly doubling from the previous quarter, the sources estimated.

Shipments of parts and components for MacBook lineups totaled an equivalent of 2.2-2.4 million MacBooks in June, and orders for July are likely to top 2.7-2.8 million units, said the sources, noting that the increase is in line with Apple's previous strategy to ramp up deliveries prior to the launch of new products.

The sources have also raised the projected shipments of MacBook notebooks for 2011 to 15 million units, compared to 13 million forecast previously.

The new MacBook Air is also expected to feature Apple's new Mac OS X, Lion, and support the Thunderbolt interface, the sources indicated.

Non-iPad tablet vendors likely to launch new Wintel-based models to compete with Apple in 2012

Intel and Microsoft are jointly touting a new Wintel-based platform for tablet PCs, raising hopes among non-iPad tablet PC vendors that they may be able to compete more effectively with Apple in the segment in 2012 with models other than ARM/Android-based products, according to industry sources.

Most non-iPad table PC vendors have been frustrated recently due to lower-than-expected performance of their tablet PCs built with ARM/Android. While attributing the slow sales to the instability of Android and the strong brand image that Apple enjoys, some vendors have also begun mulling new strategies to strengthen their competitiveness.

Knowing the demand from tablet PC vendors, Intel and Microsoft have recently revealed a roadmap for their Wintel platform to production partners, said the sources, noting that the new platform will come with a less than 5W low-power CPU from Intel paired with Microsoft's Windows 8 OS.

While Intel is also expected to lower prices for its new CPUs, tablet PC vendors also hope that the new Wintel platform will help them tackle the compatibility issues found between Android 3.0 and 3.1.

Quanta reportedly wins major mainstream notebook orders for 1H12 from Asustek

Asustek Computer reportedly has completed the distribution of its notebook orders for the first half of 2012, with Quanta Computer likely to win orders for 40% of mainstream notebook models, according to industry sources.

In terms of volume, Quanta and Pegatron Technology will retain 40% each of Asustek's total notebook orders for the first half of 2012, revealed the sources, noting that Compal will take up another 20% of Asustek's mainstream notebook orders for the period.

Asustek as well as Quanta and Compal all declined to comment on the orders.

Pegatron will remain the primary notebook production partner for Asustek in 2011, accounting for 45-50%, followed by Quanta with a 30-35% share, the sources estimated.

Thursday, June 23, 2011

Watch for double peak in semiconductor sales in 3Q12, says Information Network

The downturn in semiconductor sales over the past few months will lead to a double peak in revenues in the third quarter of 2012 before dropping again, according to The Information Network.

"Our Proprietary Leading Indicators (PLLs) show a peak in January 2010 and again in January 2011, which will be mirrored by a rebound in semiconductor sales," said Robert Castellano, president of The Information Network. "Semiconductor sales, based on SIA's three month moving average, peaked in September 2010, and we anticipate the second peak in the third quarter of 2012 before revenues start to drop."

Looking closely at SIA's statistics, a drop in April's 3-month moving average is largely attributed to a slowdown in Japan, Castellano pointed out.

"Our PLLs suggest that the upturn in the industry should have occurred in April 2011, but because of the impact of the earthquake in Japan, semiconductor revenues dropped. Macroeconomic factors such as a drop in gasoline prices and subsequent increase in Consumer Confidence will get semiconductor sales back on track," added Castellano.

TSMC 2Q11 sales expected to meet guidance

Taiwan Semiconductor Manufacturing Company's (TSMC) consolidated revenues are expected to meet the company's guidance of NT$109-111 billion (US$3.8-3.9 billion), according to market watchers.

TSMC is expected to post another sequential drop in June consolidated revenues, the watchers said. The on-month decrease, however, is unlikely to stop the company from meeting its sales goal for the second quarter, the watchers indicated.

However, the watchers expressed caution about TSMC's business outlook for the third quarter, citing weaker-than-expected demand. Orders have slowed in part due to clients' inventory build-ups, the watchers observed.

TSMC may register single-digit sequential growth in sales for the third quarter of 2011, according to the watchers, adding that their previous estimates were more optimistic.

SPIL turning focus to SiP packaging, IDM orders

Siliconware Precision Industries (SPIL) is stepping up the development of system-in-package (SiP) specifically for use in handsets, and has been more actively expanding its IDM client portfolio, company chairman Bough Lin said on June 22.

SPIL's handset-use SiP solutions have entered the design-win stage with one to two clients, with volume shipments set to start soon, Lin revealed. SiP is a compact packaging type that supports multiple chips for portable consumer electronics devices.

In addition, SPIL has turned its focus to outsourcing orders from IDMs, Lin indicated. Component suppliers for Apple's devices, for example, are usually IDM companies, Lin noted. Acknowledging increasing IDM outsourcing would create more business opportunities, SPIL is putting a heavier emphasis on IDM orders and relationships with IDM customers, according to Lin.

Lin admitted that SPIL's IDM client portfolio is less competitive compared to that of fellow companies.

SPIL used to depend on fabless IC firms for revenue growth, with orders placed by IC design companies accounting for as high as more than 80% of SPIL's total revenues.

In other news, SPIL plans to expand capacity at its Suzhou, China plant by 50% in 2011, Lin said. The company will install an additional 500 sets of copper wirebonders at the facility between the second half of the year and early 2012, Lin added.

SPIL's planned capex budget for 2011 of US$10 billion remains unchanged, according to Lin.

Asustek takes shipment lead in non-Apple tablet PCs

Asustek Computer has become the largest tablet PC brand in the non-Apple tablet PC group with shipments of 400,000 units in the first half of 2011, according to sources from notebook component makers citing figures from notebook ODMs.

The sources pointed out that Asustek's US$399 entry-level tablet PC has successfully boosted its demand in the US and the company is already preparing for the second-generation Eee Pad Transformer, using Nvidia's quad-core Tegra 3 and Google's next-generation operating system (Ice Cream Sandwich), set for launch in October at the earliest.

Asustek will also take over Acer's position and become the largest client of Nvidia for ARM-based CPUs with Asustek estimated to place orders for 2.5 million Tegra 2/3 CPUs in 2011. In addition to tablet PCs, Asustek is also said to be planning to launch a notebook using Nvidia Tegra 3 with Google Chrome for launch at the end of 2011.

The sources pointed out that Asustek uses above-standard components for its Eee Pad Transformer and the price of US$399 is almost the same as the device's cost. The profit is mainly coming from Asustek's exclusive high-margin keyboard docking station, which consumers will normally purchase along with the device.

In addition to the second-generation Eee Pad Transformer, Asustek will also sell its Eee Pad Slider in July, priced between US$650-800, 7-inch Eee Pad MeMO 3D in the fourth quarter and Padfone, using Android (Ice Cream Sandwich) and Nvidia Tegra 3 with a price range between US$549-799. All Asustek's tablet PCs are manufactured by Pegatron Technology.

For 2011, the company is aiming to ship two million Eee Pad tablet PCs, accounting for 10% of total non-Apple tablet PC shipments.

Hard drive supply gap estimated to widen to 15-20 million units in 3Q11

Global hard drive demand in the third quarter is estimated to reach as high as 180 million units with the five major hard drive makers only capable of supplying 160-165 million units, increasing the supply gap from a shortage of 10 million units in the second quarter, according to sources from hard drive makers. The gap is unlikely to be filled before the end of 2011.

The strong demand in the third quarter will be mainly due to the IT product replacement trend in the enterprise market, as well as the increasing storage needs of cloud computing servers.

Although the supply shortage of hard drives will help maintain prices, hard drive shipments to enterprise servers, which were originally expected to strongly benefit makers, may face a decline. Currently, 50% of hard drive supply is used in desktops, notebooks and netbooks, with cloud computing servers only accounting for less than 10%. But since demand for Internet data storage is growing, hard drive makers are turning more aggressively toward the server hard drive market, which has higher profitability.

Currently, the top-10 notebook brand vendors have close to 80% of their models using either 320GB or 500GB hard drives, with the proportion at 5:5. In the third quarter, the proportion of 320GB and 500GB hard drive is expected to shift to 4:6 with 250GB models only having a very small percentage. 640GB and 750GB capacities will mainly be used in enterprise and gaming models and are unlikely to grow to become the mainstream specification in 2011.

Wednesday, June 22, 2011

Elpida develops 4-layer DRAM package with 0.8mm thickness

Elpida Memory and its subsidiary, Akita Elpida Memory, have announced development of a four-layer 0.8mm DRAM package. The thin package consists of four low-power consumption 2Gb DDR2 mobile RAM chips, assembled using package-on-package (PoP) technology.

The four-layer 0.8mm package is an eco-friendly DRAM solution that will be used in smartphones and tablet PCs to make these and other mobile devices thinner and achieve a higher memory density, Elpida said. Volume production is expected to begin in the July-September quarter of 2011.

Elpida believes the four-layer package can respond to the need not only for greater memory chip thinness but also to customer demand for improvements in memory density and memory configuration.

PoP technology is used to assemble and test different kinds of semiconductor chips in individual packages. These packages are then stacked atop each other to form a PoP configuration. Since PoP technology enables reductions in mounting space and wire length, the technology is seeing rapidly expanding applications in the mobile device market.

Gartner cuts 2011 chip forecast

While IHS iSuppli has slightly raised its forecast for the global semiconductor industry this year, Gartner has revised downward its growth projection for the sector to 5.1% from 6.2% previously predicted.

Gartner said the earthquake and tsunami in Japan raised concerns about the supply of silicon wafers, batteries, crystal oscillators, packaging and other specialized materials, but the supply constraints have not derailed the electronics industry.

"In the last two weeks of March, vendors stepped up efforts to secure supply in the face of uncertainty and potential shortfalls - leading to some double ordering which continued into the second quarter. We think vendors were cautious with their second quarter guidance, and we expect the majority will exceed those estimates," said Peter Middleton, principal research analyst at Gartner.

Gartner now forecast that worldwide semiconductor revenues will total US$315 billion in 2011, up 5.1% from US$299 billion in 2010. This is down from the firm's previous projection in the first quarter for 6.2% growth this year.

"Although the impact is less than feared, we are anticipating some residual effects in the third quarter of 2011 as friction in the supply chain may impact some production and some surprises may occur," Middleton continued. "However, once third-quarter trends are established and supply chain participants are satisfied that all issues are understood and production is normalized, we expect an effort to draw down inventory, which will weaken the semiconductor market in late 2011 and early 2012."

Worldwide application-specific standard product (ASSP) revenues are projected to reach US$79.7 billion in 2011 and grow to US$99.4 billion by the end of 2015, Gartner said. Meanwhile, with Apple's application-specific integrated circuit (ASIC) investment and a commanding grip on popular mobile devices, the ASIC market will experience solid growth through 2015, Gartner indicated. The highest overall growth through 2015 is coming from nonoptical sensors, which are primarily driven by automotive applications, but high growth is coming from increased sensor use in applications outside automotive, especially smartphones, tablets and video game hardware.

Gartner's analysts are seeing rapid semiconductor growth in the smartphone and media tablet categories. Through 2013, two-thirds of semiconductor industry revenue growth will come from smartphones and tablets, Gartner noted.

IHS said that the semiconductor industry is showing "remarkable resilience in the face of the Japan disaster and uncertain economic conditions." Anticipated soaring sales of popular consumer products such as smartphones and tablets has prompted the firm to raise its growth forecast this year to 7.2%.

TSMC, UMC likely to lower capex budgets for 2011, says paper

Taiwan's two foundry giants are likely to revise downward their capex goals for 2011 due to worries that orders in the second half of the year may not be large enough to fill their expanded capacities, the Chinese-language Apple Daily cited sources at chip equipment suppliers as indicating on June 22.

TSMC is expected to lower its capex budget this year from US$7.8 billion to US$7 billion, while UMC may cut its 2011 budget to US$1.6 billion from US$1.8 billion, according to the paper.

UMC said last week that its planned capex budget for 2011 of US$1.8 billion remains unchanged. The foundry warned that wafer ASPs might come under downward pressure in the second half of the year due to particularly weak demand.

TSMC during its most recent investors conference reiterated its 2011 capex budget of US$7.8 billion, and added that only upward adjustments would be made thereafter.

TSMC, UMC likely to lower capex budgets for 2011, says paper

aiwan's two foundry giants are likely to revise downward their capex goals for 2011 due to worries that orders in the second half of the year may not be large enough to fill their expanded capacities, the Chinese-language Apple Daily cited sources at chip equipment suppliers as indicating on June 22.

TSMC is expected to lower its capex budget this year from US$7.8 billion to US$7 billion, while UMC may cut its 2011 budget to US$1.6 billion from US$1.8 billion, according to the paper.

UMC said last week that its planned capex budget for 2011 of US$1.8 billion remains unchanged. The foundry warned that wafer ASPs might come under downward pressure in the second half of the year due to particularly weak demand.

TSMC during its most recent investors conference reiterated its 2011 capex budget of US$7.8 billion, and added that only upward adjustments would be made thereafter.

International smartphone vendors face competition from local brands in Southeast Asia

With sales ratios of smartphones to total handset sales in some markets in the Southeast Asia region expecting to grow about from 10% currently to 40-50% in the next 3-5 years, the region is becoming a battle field for all smartphone vendors, according to sources at Taiwan handset makers.

Branded handset vendors such as Nokia, RIM, HTC and Samsung Electronics, which have the comparative advantage of already built up footholds in the region, are set to meet with strong competition from local brands in the area, commented the sources.

Although Nokia has seen its share in the global handset market continue to decline recently, the vendor remains the largest vendor of feature phones in the region and is expected to further strengthen its competitiveness after its switches to the Windows Phone platform, indicated the sources.

RIM, Samsung and HTC are expected to continue to expand their shares in the region as RIM has been successfully selling its QWERTY models in Indonesia, while Samsung and HTC both have strong product portfolios, the sources added.

However, some local brand vendors in the region, including Spice and Micromax of India, Nexian of Indonesia, i-Mobile of Thailand and G'Five of China, will serve as strong contenders to compete with international brand vendors as they are able to offer multiple models with special features at low prices, said the sources.

Sales ratios of smartphones in Indonesia, the Philippines, and Thailand are expected to top 50% in 2015, while the comparable ratio in Vietnam is likely to reach 36.7% during the period, according to market research firm Canalys.

Global HDD supply short by 10 million units in 2Q11

Global demand for hard disk drives (HDDs) in the second quarter is estimated at 160 million units while total supply by the five main international vendors is expected to be 150 million units, resulting in a supply gap of 10 million units, according to industry sources.

The gap may broaden in the third quarter as demand for PCs increases, the sources indicated.

Several vendors plan to offer ARM-architecture notebooks

Several vendors, including Samsung Electronics, Toshiba, Acer and Asustek Computer, plan to develop ARM architecture notebooks, with products possibly to be launched as early as the end of 2011, according to industry sources.

The sources pointed out that ARM-based systems using Android were already launched under the smartbook name two years ago with Toshiba and Lenovo both launching products in the retail channel. However, due to weaker than expected demand, the related products were soon phased out of the market.

Since ARM's CPU has already been upgraded from single-core two years ago to quad-core with a significant increase in performance, while the platform's storage capacity has also seen significant improvements, and an enhanced user interface, ARM is already capable of launching notebook products that are able to run for a long period of time, and if the price is attractive, there is a great chance for the products to create a brand new market segment in the IT industry.

Asustek has already made plans to launch a 13-inch ARM-based notebook adopting Nvidia's processor with Android.

The sources pointed out that there are already several brand vendors reportedly set to launch ARM-based notebooks with prices lower than US$299 to compete for market share and the vendors' processor choices include Nvidia's Tegra, Qualcomm's Snapdragon and processors from Texas Instruments.

RIM lowers internal 2Q11 sales target for PlayBook

RIM, viewing that only about 500,000 PlayBooks, its first tablet PC, were sold globally from its launch in mid-April to early June, has downward adjusted its internal sales target for the second quarter, from 2.4 million units originally to 800,000-900,000 units, according to sources from Taiwan-based supply chain makers.

The sources pointed out that the PlayBook achieved strong sales of 40,000-50,000 units on its launch day, but demand from then to mid-April was lower-than-expected. RIM originally set to ship 2.4-2.5 million PlayBooks three months after launch, but since the company was only able to sell about 500,000 units in total by early June, it will be difficult for the company to achieve its original goal, the sources explained.

However, since the three models of RIM's PlayBook that are currently available in the retail channel, only support Wi-Fi, market watchers are still optimistic about models with 3G, LTE and WiMAX support, which are set to launch after the third quarter, and believe PlayBook's sales will start picking up after these models are released.

Although PlayBook did not achieve its original shipment target, its shipment performance is still one of the front-end players within the non-Apple tablet PC group, especially for products mainly selling in the US and Europe.

Apple currently still has the strongest sales among tablet PC players with its orders to the supply chain expected to reach 8-10 million units in the second quarter. In addition to RIM, Acer has also recently reduced its Iconia tablet PC shipments target from 5-7 million units in 2011 to only 2.5-3 million units.

Currently, monthly shipments of Motorola's Xoom, Acer's Iconia, Asustek's Eee Pad Transformer and RIM's PlayBook average at about 100,000-200,000 units, and with Hewlett-Packard (HP) also set to launch its TouchPad in early July, these devices will still need to face a lot of challenges to boost their market demand in the future.

Amazon to launch tablet PCs in August-September, say Taiwan component makers

Amazon is poised to step into tablet PCs and will launch models as son as August-September, with targeted global sales of four million units for 2011, according to Taiwan-based component makers.

The timing of launch is to meet the peak sales period prior to Thanksgiving in the US and the year-end holidays in the US and Europe, the sources pointed out.

Amazon adopts processors developed by Texas Instruments, with Taiwan-based Wintek to supply touch panels, ILI Technology to supply LCD driver ICs and Quanta Computer responsible for assembly, the sources indicated. Monthly shipments are expected to be 700,000-800,000 units.

Amazon will provide streaming movie services for users of its tablet PCs, the sources noted.

Tuesday, June 21, 2011

Smartphones to boom in Southeast Asia, says Canalys

About 106 million mobile phones are expected to ship in Southeast Asia in 2011, up 19% from the 90 million units shipped last year, according to Canalys. Driveny primarily by smartphone growth, the number will increase to 163 million by 2015, said the market research firm.

Smartphone shipments will achieve a CAGR of 39% over the next four years, with particularly strong momentum anticipated in emerging markets such as Indonesia, the Philippines and Vietnam, Canalys said.

Canalys pointed to several key factors that will fuel the region's smartphone market expansion, including a positive economic outlook, local operators' eagerness to grow average revenue per user (ARPU) from increased data subscriptions, strong social media usage among end-users, robust demand for mobility products and competitively priced phones.

"Southeast Asia has a diverse but incredibly dynamic smartphone market right now," said Rachel Lashford, managing director of Canalys, Mobile & Asia Pacific."Consumers and vendors are in a win-win situation, thanks to a powerful combination of mobile-savvy end-users and a favorable economic landscape."

Both within the region and globally, Singapore particularly stands out as having one of the most advanced markets in terms of smartphone penetration, Canalys said. In 2010, smartphones accounted for 61% of all mobile phones shipped in the country, significantly higher than the global average of 23%. Phones priced at the premium end of the market found favor with local consumers, with more than 50% of smartphone sales priced over US$550. Canalys forecasts that this trend will continue through 2011, with high-end devices accounting for the majority of the 3.1 million smartphones expected to ship in Singapore.

"The three major operators in Singapore have successfully enticed consumers through their wide product portfolios, competitively priced bundled data contract plans, attractive subsidies and strong marketing campaigns to promote the latest smartphones," said Canalys principal analyst Daryl Chiam. "SingTel, for example, has worked closely with HTC for the exclusive launch of the ChaCha smartphone last week."

In contrast to Singapore, Canalys anticipates competitively priced mid- and lower-tier products to generate growth in other parts of Southeast Asia.

Meanwhile, on the vendor front, Nokia will continue to face pressure as a result of its ongoing strategy and platform transitions, according to Canalys. With its wide distribution network capable of pushing significant volumes, Canalys believes that the vendor is still well-placed and should not be underestimated.

"Once Nokia is through this transitional period and has delivered a Windows Phone-based product portfolio across several price points, it will re-establish itself as a formidable force in the smartphone market," Chiam noted. "Until then, other manufacturers will be looking to fill the gap."

Apple demands 10% quote cuts from component suppliers in 2Q11, says paper

Apple's suppliers of components such as PCBs, optical components, battery modules and touch panels are reportedly facing pressure from Apple, which has demanded quote cuts of 10% for the second quarter of 2011, according to a Chinese-language Economic Daily News (EDN) report.

Since Apple's tablet PC shipments are expected to grow 70% sequentially to eight million units in the second quarter, significantly benefiting related upstream component suppliers, Apple has demand its suppliers to provide cuts in return, the paper noted.

Since Apple's tablet PC shipments are expected to continue increasing in the third quarter, Apple is likely to demand for more cuts in the quarter, the paper added citing the component makers.

Component makers may suffer on poor Nokia, RIM outlook

Some Taiwan-based handset component makers including Merry Electronics, Ichia Technologies and Silitech Technology may see weak sales in the second half of 2011 as Nokia and Research in Motion (RIM), two of their major clients, have both revised their guidance for the second quarter or even for all of 2011, according to industry sources.

Nokia and RIM have been the largest buyers of handset keypads, and Nokia has been the most important client for acoustic components for local makers, the sources noted.

However, Nokia and RIM are expected to see their market shares dented by other brand vendors due to a weak portfolio of new high-end models to enable their competition in the smartphone market, the sources said.

Merry has managed to cut into the supply chain for Apple's iPhones, and therefore has minimized the impact resulting from reduced orders from other clients, indicated the sources.

Elpida, Micron reportedly in talks on DRAM partnership

High-level executives from Elpida Memory, Micron Technology and Nanya Technology reportedly have been holding frequent talks as a warm-up to some form of partnership in the future. They are discussing how they can cooperate to compete with Samsung Electronics, the long-time market leader for DRAM memory, according to industry observers.

Their latest talks have touched on the possibility of Inotera Memories, currently the joint venture between Micron and Nanya, being run as an integrated platform under the pair's planned partnership with Elpida, according to the sources. Elpida is also mulling plans to acquire some Inotera shares held by the Formosa Plastics Group (FPG).

FPG, the largest plastics manufacturing conglomerate in Taiwan, is the parent company of Nanya and Inotera. The parent and its affiliate companies have usually thrown full support behind the fundraisers initiated by Nanya and Inotera.

Elpida and Micron were in talks about DRAM technology co-development between late-2008 and early-2009, but no consensus was reached mainly due to capital issues, the sources observed. Cooperation talks were also hard to continue as DRAM prices began to rebound in mid-2009, the sources pointed out.

Elpida uses stack capacitor technology and has unveiled development of a new 25nm process with volume production expected to begin in July. Elpida has a production subsidiary in Taiwan, Rexchip Electronics, and has signed foundry deals with Taiwan-based Powerchip Technology and ProMOS Technologies.

Powerchip and ProMOS have both recently disclosed plans to place a heavy emphasis on contract manufacturing.

Micron has jointly developed stack process technologies for DRAM with Nanya. The pair announced in early 2010 their co-developed DDR3 chip using copper-based 42nm DRAM process technology.

Industry observers believe that if Elpida partners with Micron on technology, some form of consolidation among Taiwan-based DRAM companies is expected to carry out.

Intel to launch Ivy Bridge in March 2012

Intel has recently decided to launch its next-generation Ivy Bridge CPU in March of 2012, back from its original schedule at the end of 2011 to allow a better transition between the new and old platform, according to sources from notebook players.

The sources pointed out that the delay of the Ivy Bridge platform will give vendors more time to sell their Sandy Bridge-based notebook models.

Due to Intel Sandy Bridge's 6 series chipset design flaw, Intel recalled the products in January and launched a fixed chipset in April, leaving notebook players suffering from two months of lower demand. With the notebook market also experiencing an impact from the tablet PCs, Intel has decided to slow down its pace and re-organize its lineup by delaying the launch.

Ivy Bridge was originally expected to start mass production in November of 2011 and will be announced in January of 2012, but the delay is expected to move the official launch to after March 2012.

HP, Acer set eyes on the enterprise PC market

First-tier global PC brand vendors Hewlett-Packard (HP) and Acer are both placing their focus on the enterprise market in the second half of 2011 with HP recently launching 22 new enterprise-based PC models and Acer chairman JT Want declaring that the enterprise and cloud computing markets will be a key segment that the company will work in, according to sources from PC makers.

The consumer notebook market has been seriously impacted by strong tablet PC demand in 2011, causing brand vendors to see lower-than-expected growth compared to previous years, while the enterprise PC market has been affected by the economic crisis, which delayed IT purchases. However, brand vendors expect enterprises to start replacing their IT equipment in the second half and therefore they have been working aggressively for the segment, the sources noted.

The sources pointed out that the enterprise PC market already started recovering in the second half of 2010 and is seeing a more obvious growth in 2011. Enterprise buyers normally take longer for their purchase evaluation, causing the enterprise market to see delayed growth from the consumer market, but the growth will be last longer.

The sources cited figures from IDC and pointed out that HP was the largest enterprise PC vendor in the first quarter of 2011 with a share of 22% for the desktop segment, while Dell was the second largest vendor in the quarter with a 4 percentage points behind HP, follow by Lenovo, Acer and Fujitsu. As for the enterprise notebook segment, HP was still the largest, follow by Lenovo, Dell, Acer and Toshiba.

Sunday, June 19, 2011

Battery maker AcBel to benefit from cloud computing opportunity

Taiwan-based battery maker AcBel expects its revenues to see a double-digit percentage growth in 2011, benefiting from cloud computing driving demand for server power supplies, according to the company.

Market watchers pointed out that AcBel has been cooperating with IBM for many years, while Dell, Hewlett-Packard (HP) and Foxconn Electronics (Hon Hai Precision Industry) are all clients of AcBel in the industrial-use battery business.

In addition to industrial-use batteries, AcBel expects consumer-use power devices and fuel cells to become sales drivers for 2011, while smart grid and LED streetlight businesses have the most growth potential in the future.

Although the company will see strong growth in revenues, due to Taiwan's exchange rate, the company's gross margin is expected to drop from 14-15% in 2010 to 13-14% in 2011

Acer reducing 2011 tablet PC shipment target by 50%

Acer, on June 15, announced that the company has reduced its annual tablet PC shipment forecast from originally 5-7 million units to only 2.5-3 million units, a drop close to 50% and with brand vendors such as Motorola, RIM and Samsung Electronics all reportedly having reduced their tablet PC sales targets for 2011, concerns about whether Android-based tablet PCs will be able to compete against Apple's iPad are starting to rise among market watchers.

At the company's investors meeting on June 15, Acer chairman JT Wang pointed out that the company is currently in the middle of a great transition and the company's current goal is to lower its retail channel inventory. The company expects to continue working on digesting its inventory throughout the third quarter with expectations to have an inventory level the same as 7-8 years ago. Although Acer will reduce its annual tablet PC shipments, Wang is still confident about the performance of Android-based tablet PCs.

Wang pointed out that all the things that the closed system can do will all be able to function in the open system, but if consumers use the former, they will need to follow everything the closed system designers says and have no choice for expansion, or run Flash, and will not be able to be their own master. Acer is trying to serve consumers who want to make their own decisions.

Wang noted that after taking a series of emergency measures, Acer is currently in a safer state than before and should reach its shipment goal for the second quarter of a sequential drop of 10%. For the future, Wang expects Acer's third-quarter shipments to share a similar volume as in the second with a chance to be better. Its performance will bounce out of the button after the third quarter.

In addition to reducing inventory, the company is also working on reorganizing its employee management and is set to lay off about 300 employees in Europe, Africa and the Middle-East, while the US, Greater China and Asia Pacific markets will see no changes.

Acer president Jim Wong pointed out that the company already shipped 800,000 tablet PCs before the end of June and with the launch of its new 7-inch tablet PC, Acer's tablet PC shipments in the third quarter will reach 800,000 units. Wong added that the estimated numbers are all retail channel sales and include no additional 'push'.

Notebook ODMs becoming conservative over 2H11 outlook

Notebook ODMs including Quanta Computer, Compal Electronics and Wistron have become more conservative about the business outlook for the second half of 2011 due to drastically changing market conditions in the US and Europe, and the deferred buying effect brought about by the planned launches of tablet PCs from brand vendors, according to industry sources.

Factors including debt problems in Europe, steep falls of stock prices in the US plus its high unemployment rate are likely to work to undermine consumer purchasing, the sources pointed out.

Although back-to-school demand in September, and the Thanksgiving and year-end buying seasons are highly anticipated, most ODMs are not very active in building up inventories of parts and components, indicated the sources.

Additionally, consumers are also waiting for the launches of tablet PCs from Amazon and Barnes & Noble as well as from Hewlett-Packard (HP), Dell and Lenovo in the second half of 2011, deferring their buying of new notebooks, the sources added.

The sales ratios of notebooks in the first and second halves of 2011 will be 50:50 instead of 40:60 as in previous years, Wistron chairman Simon Lin said earlier.

Quanta has also stated it does not think that the second half of 2011 will be an exciting peak season for notebook makers although sales in the latter-half will grow 10% from the first half.

Compal, which has already lowered its notebook shipment goal for the year to 48 million units, may see its shipments affected further by inventory adjustments at Acer, the sources pointed out.

Friday, June 10, 2011

Tablet DRAM demand explodes in 2011 as market expands beyond iPad, says IHS iSuppli

Demand for DRAM generated by tablets will rise by a factor of nine in 2011, fueled by booming sales of the iPad, combined with the arrival of more competitive alternative products, according to new IHS iSuppli research.

Tablets this year will consume 333.7 million Gb of DRAM, up from 37.3 million Gb in 2010. DRAM demand from tablets then will vault to 1.1 billion Gb in 2012 and continue to climb during the next four years, reaching 5.8 billion Gb by 2015.

Tablet shipments this year are projected to reach 63.2 million units, up from 17.5 million in 2010, and will hit 113.9 million units next year.

"Because of their soaring shipments, tablets are gaining increasing prominence in the DRAM market," said Mike Howard, principal analyst for DRAM and memory at IHS iSuppli. "The iPad, which has single-handedly dominated the tablet business since its introduction last year, will account for the bulk of the DRAM demand in the market in 2011 and the following years. However, competition to the iPad is seeping into the market, driving further DRAM demand."

iPad competitors on market now include the Galaxy Tab from Samsung Electronics, the Xoom from Motorola, the PlayBook from Research In Motion and the TouchPad from Hewlett-Packard (HP). None of these entrants have seriously endangered the hegemony of the iPad. However, a new competitive tablet device from bookselling and retail giant Amazon could represent the most serious challenge yet for the iPad, potentially driving even more DRAM demand.

"Unofficial reports of a new tablet device being readied by Amazon to go head to head with the iPad bodes nothing but good news for the DRAM market," Howard said.

Reports indicate that an Amazon store with a broad range of content, including music, digital games, movies, TV shows, books and Android apps, will be available to users of the Amazon tablet at the time of launch. This will represent serious competition to the Apple iTunes store and potentially allow the Amazon tablet to succeed where competing tablets have failed.

While no specs have yet been announced for an Amazon tablet, Amazon's aptitude for delivering a satisfactory customer experience is well-known. The Amazon tablet will compete on user experience - not necessarily on hardware specs.

With DRAM content in the Amazon tablet expected to be robust, estimated to be 4Gb per device, similar to the iPad 2, tablet DRAM demand is likely to remain a bright spot for the memory industry in the years ahead.

TSMC May revenues up 5.4% on year

Taiwan Semiconductor Manufacturing Company (TSMC) has announced consolidated revenues for May 2011 of NT$36.71 billion (US$1.28 billion), up 5.4% on year.

TSMC's consolidated sales for April and May totaled NT$73.84 billion. It has estimated second-quarter sales at NT$109-111 billion, up 3-5% sequentially.

TSMC accumulated NT$179.21 billion in consolidated revenues from January through May, showing a 11.4% increase compared to the same period of 2010.

TSMC recently reiterated that consolidated revenues would grow by 20% in 2011. It registered NT$419.54 billion in consolidated sales last year, up 41.9% from 2009 levels.

Asustek to ship 300,000 Eee Pad Transformer tablets in June, says chairman

Asustek Computer's shipments of Eee Pad Transformer tablet PCs will reach 300,000 units as projected for June, and will account for 10% of total revenues for the month, according to company chairman Jonney Shih.

For the first half of 2011, total shipments of Eee Pad Transformers will top over 400,000 units compared to its target of 300,000, Shih added.

Shih made the remarks while Acer has lowered its tablet PC shipment target for 2011 from 7.5-10 million to five million units. But sources at component suppliers believe that Acer's revised target still remains too high.

While Motorola Mobility has said that it shipped 250,000 Xoom tablets during the February-April period, the sources indicated total shipments of Xoom tablets will be below 500,000 units by the end of June.

Additionally, sales of Samsung's Galaxy Tabs and HTC's HTC Flyers tablets have been flat so far, the source added.

With plans to launch new models including sliding tablets and its Padfone, Asustek is confident that it will be able to sustain its goal to ship two million tables PCs in 2011, Shih stated.

China makers to roll out 2.2-2.3 million tablet PCs in 2011

Production of white-box tablet PCs in China is expected to grow 20-30% on year to 2.2-2.3 million units in 2011, with 7-inch models accounting for 60% of output followed by 8-inch models at 15% and 9.7-inch ones at 10%, according to sources citing figures from research firms.

Due to consumers in China being more sensitive to price and favoring products with high performance/price ratio, 7-inch models are receiving the most attention from China consumers.

Because most of China's white-box players have already have experience related operating strategy, sales model, and product R&D, they were able to quickly cut into the white-box markets for tablet PCs and netbooks. With their products' added-value and lower prices, these white-box players expect their advantages to help them attract consumers.

In addition to standard web browsing, most of the white-box tablet PC players are adding functions such as camera modules, e-book reading and GPS into their machines to increase the performance/price ratio to compete against first-tier vendors.

However, although most of the white-box vendors are attracting consumers with low prices, labor and material costs have been rising, and the increasing exchange rate of the Chinese Yuan is also damaging their gross margin. Players are now aggressively looking to sell their products to markets outside of China to boost their overall profitability.