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PC replacement wave could boost sales of local suppliers

TAIPEI--The end of support for the long-lived Windows XP is expected to bring a boost to local PC part suppliers as users move to replace their older computers, market analysts said Thursday.

The replacement wave has benefited the global PC industry by slowing down the pace of declining shipments and offsetting the impact of weak demand, in turn raising local PC parts suppliers' sales for the first quarter.

Revenue growth at Taiwanese parts makers is expected to continue growing into the second quarter as more and more consumers rush to buy new PCs to retire their old ones, according to analysts.

Industry market advisory firm Gartner said that global PC shipments in the first quarter hit 76.60 million units. While that number is down 1.7 percent from a year earlier, the severity of the decline eased compared with the previous seven quarters.

Gartner attributed the smaller decline to the ending of Microsoft's support for Windows XP on April 8, prompting many to buy new devices, particularly desktop PCs for commercial use, amid fears that an unsupported operating system will leave a PC exposed to a growing number of security risks.

The firm said replacements in the global market could continue throughout the year.

Yuanta Investment Consulting took an even more upbeat outlook, saying the replacement wave will continue into the first half of next year.

Delta Electronics Inc. (台達電子), one of Taiwan's leading power management system providers, has been one of the beneficiaries, analysts said.

In an investor conference held Wednesday, Delta said it posted NT$43 billion in consolidated sales for the first quarter, up 11 percent from a year earlier, and its earnings per share stood at NT$1.87, up from the NT$1.72 recorded over the same period last year.

Delta Chairman Yancey Hai told investors that the PC part business saw better-than-expected figures in the first quarter and is expected to stay stable through the second quarter to show annual growth.

Also riding the PC replacement wave are connector makers Lotes Co. (嘉澤端子) and Longwell Co. (良維科技), which enjoyed annual sales increases of 12.89 percent and 19.14 percent, respectively, in the first quarter. Longwell said its sales growth momentum is expected to accelerate in the second quarter.

For its part, LCD monitor maker Syncmold Enterprise Corp. (信錦企業) said PC sales appeared to have sped up in March, when the company witnessed its consolidated sales grow 49.41 percent from a month earlier to NT$765 million. The company said the August sales could rise further to surpass NT$800 million.

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