Posted by: Bruce Einhorn on December 13, 2007
Just how dominant are the Taiwanese in the global PC industry? Here’s an impressive stat: According to DisplaySearch, Taiwan’s electronics companies make 89% of the world’s notebook computers. Problem is, when you make 9 out of every 10 laptops, there’s not a whole lot of room to grow. That’s one reason that investors are suddenly sour – really sour – on Taiwanese companies that manufacture portable computers for HP, Apple, Sony, Dell and most everybody else. Today the shares of Quanta, the world’s biggest maker of notebook PCs, fell to a 52-week low. They’ve dropped 20% since the beginning of the year.
Other big Taiwanese manufacturers are feeling the pain, too. Compal, the world’s No. 2 notebook maker, on Halloween reported record quarterly profits and last week reported a 53.6% rise in sales in November, but the stock has plunged since the start of last month. Wistron, the third-biggest Taiwanese notebook maker, is sharply down, too. In addition to worrying about growth possibilities for the Taiwanese, investors are also concerned about battery shortages. And then there’s the fear of looming economic slowdowns in the U.S. and Japan. Taiwanese already have to settle for earnings scraps after getting pressure from customers like Dell and HP to lower prices. If there’s a recession, Taiwan’s computer makers will get squeezed even more.