Legend's soaring sales may boost parts orders
COMPUTERS: With the company's sales soaring, its manufacturing partners in Taiwan are likely to benefit from an increase in orders for parts and components
By Dan Nystedt
STAFF REPORTER
Soaring profits at China's largest computer retailer and brisk sales of Pentium4 chips to the world's most populous nation bode well for computer manufacturers in Taiwan, analysts said yesterday.
Legend Holdings Ltd (Áp·Q¶°¹Î), the largest computer maker in China, announced profits that beat analysts' expectations by a large margin on Wednesday. The firm earned NT$1.1 billion (US$33 million) in the quarter ended June 30, an 82 percent increase over the same time last year. Legend credited strong domestic computer demand for the company's performance.
"They make most of their own computers ... the notebook is one important outsourcing product," said Alex Huang, electronics analyst at Dresdner Kleinwort Benson in Taipei.
Legend's manufacturing partners in Taiwan include First International Computer Inc (¤j²³¹q¸£), Compal Electronics Inc (¤¯Ä_) and Mitac International Corp (¯«¹F¹q¸£). The Chinese firm imports notebooks from First International and Compal. Other computer components and fully assembled desktop units are gathered from First International, Mitac and other component-makers in Taiwan.
News of a rapidly expanding market for personal computers in China also came from Intel CEO Craig Barrett during a recent high-tech conference in Taipei.
China currently leads the world in purchases of Intel's fastest Pentium4 chips, he said. He credited aggressive pricing on the part of companies like Legend Holdings for the rise in sales.
Legend's sales figures backed up the Intel chief's comments. The company said it sold 651,000 desktop PCs, many of them with Intel Corp's most advanced Pentium4 processors inside. The firm claimed that China's computer market grew by 28 percent during the quarter. Legend currently holds 33 percent of China's computer market, and is one of the nation's top retailers.
Huang said Taiwan's two top PC sellers in China are Acer Inc (§»¹q) and Asustek Computer Inc (µØºÓ¹q¸£). He said that Acer holds the largest share, and that Asustek concentrates on sales of its notebook computers only.
Both firms entered China's computer market over five years ago in a bid to catch the rising tide. Heavy investments in advertisements and assuring product quality and service have won Acer a place among the top 10 computer sellers overall in China.
The worldwide downturn in spending on high tech gear has sent a number of Taiwanese firms dashing to China in hopes of gaining a piece of the growing market there.
Some estimates place Taiwanese investment in China at around US$70 billion, mostly over the past decade, though government figures say the amount is half that much.
The pace of investment has picked up steam during the past year due to hard economic times in Taiwan and hopes that cheap labor and available land in China will increase corporate earnings, analysts said.
