APAC PC shipments swelled in 2007, according to IDC

Research house IDC’s preliminary results have shown that the Asia-Pacific (excluding Japan) PC market grew 20.9 percent to reach 66.6 million units in 2007. Portable PCs continued to be a key driver, with nearly every country posting double digit growth in this form factor from the previous year. Lenovo retained a commanding lead in total PCs in the region, although HP’s aggressive moves in the consumer space helped it to close the gap by nearly two percentage points. Dell, Acer, and Founder rounded out the top five vendors.

“It was a spectacular year for the PC market in Asia,” said Bryan Ma, director of Asia-Pacific personal systems research at IDC. “Even though wildcards such as the US economy are looming overhead, the fundamentals are so solid that the market could very well beat our conservative expectations for 16.8 percent growth in 2008. China’s economic momentum should accelerate both before and after the Summer Olympics, and portable PCs will continue to be a hot segment of the market across all countries, especially as the competition for sexy-looking consumer products intensifies.”

The fourth quarter of 2007 in particular grew one percent sequentially and 21 percent year-on-year to reach 18.1 million units, which was generally in line with expectations. Some markets such as India, Malaysia and Vietnam came in short of forecasts due to tender delays, while portables recovered significantly in Indonesia as products were able to clear customs procedures more easily than before. Similar to the rankings for full year 2007, Lenovo led the market in the fourth quarter, followed by HP and Dell, the latter of which has been continuing its recovery in the region.

“Even if results from the SITEX show were a bit tamer than the COMEX show, the Singapore PC market continued to meet expectations in 4Q07 with 22 percent growth year-on-year,” said Reuben Tan, senior manager of Asia-Pacific personal systems research at IDC. “As we move into 2008, consumers will likely drive the Singapore PC market, which will help make up
for any potential delays in the government’s Standard Operating Environment project.”

Kathy Sin, research manager of Asia-Pacific personal systems research at IDC, added: “Hong Kong’s PC market continued to do well, beating forecasts by seven percent despite the seasonal 4Q lull as channel inventory was filled. Healthy economic growth should continue to fuel the market into 2008 with little or no problem.”
Many notebook PC brands have now outsourced 100 percent of their core notebook PC barebones assembly to subcontract manufacturers

Display market research firm DisplaySearch has found that 89 percent of the 29 million notebook PCs shipped in third quarter of 2007 were made by Taiwanese OEMs. This sets a new record high, up from 85 percent in the second quarter of 2007 and 80 percent in the first quarter of the year.

Many notebook PC brands outsourced 100 percent of their core notebook PC barebones assembly to subcontract manufacturers, including HP, Dell, Apple and Acer Gateway. Some brands such as Toshiba, Sony and Fujitsu insist on maintaining some in-house assembly.

Among Taiwanese OEMs, Quanta is the leading manufacturer with a 34 percent market share on a unit basis, followed by 24 percent at Compal, and 13 percent at Wistron. LCD panels are consigned by notebook PC brands and then shipped to the OEM for assembly. HP is the top notebook LCD panel customer for Samsung, LPL and AUO.

Highlights of the Q3 ’07 Quarterly Notebook PC Value Chain Report include:

• 31.9 million notebook LCD modules were shipped from TFT LCD makers, while notebook PC manufacturers shipped 29 million units. These variances were mainly due to supply chain, assembly lead time, buffer stocks and channel inventory.

• As shown in Table 1, Quanta led the Notebook PC subcontract manufacturing market with a 34 percent share in Q3’07, followed by Compal, Wistron, Inventec and ASUSTeK.

• The main customers for Quanta are HP, Dell, Acer and Apple, and the main customers for Compal are Dell, HP, Toshiba and Acer. The main customers of Inventec are HP and Toshiba. HP, Acer and Lenovo are the main customers of Wistron. And the main OEM customers of ASUSTeK are Toshiba and Dell.

In Q3’07, HP was the top customer of LG.Philips LCD, Samsung and AUO. Sony, Toshiba and Lenovo are the main customers of TMDisplay. Sony and Dell were the two major notebook LCD customers of CPT.

In addition, each of the top five suppliers looked to their top five customers for at least 50 percent of their volume, with the exception of CMO.
DisplaySearch has discovered the growing availability of high definition (HD) content and high definition DVD players has created an opportunity for 16:9 displays. Therefore, 16:9 notebook panel and LCD monitor panels are showing up on the major TFT LCD maker roadmaps. 16:9 notebooks are targeting the high definition DVD embedded notebook, while 15.x”W 16:9 LCD monitors are targeting entry-level LCD monitors. In addition, Gen 6 and Gen 7 were originally designed for LCD TV (16:9). Panel makers need to find appropriate monitor products for Gen 5, Gen 6 and Gen 7, like 16:9 monitors such as 15.0”W, 15.6”W, 18.4”W and 24”W FHD.

However, we also see some size competition will happen in 2008. In the notebook PC application, Samsung introduced 16:9 16.0W notebook panels while AU Optronics (AUO) and Chi Mei Optoelectronics (CMO) are developing 16:9 15.6”W notebook panels. In the monitor application, AUO chose 15.0”W for its first 16:9 LCD monitor panel, while CMO wants to use 15.6”W LCD monitor panels for its next major wide monitor. AUO thinks that 15.6” widescreen monitor panels will face a price position problem between 15.6”W notebooks and 15.4”W notebooks. But CMO thinks efficiency is the key for panel size; therefore, 93 percent efficiency of 15.6”W at Gen 5 is a very good choice from CMO’s point of view. Besides, China LCD panel makers such as SVA-NEC and BOE are also planning to mass produce 15.6” monitors at the end of Q1’08. This has helped CMO to boost its 15.6” panel campaign.

In LCD TV panels, suppliers are developing low-brightness and low-cost models by using new backlight structures for increased savings. The top five panel makers are also developing FMB (Front Mount Bezel) to reduce the mechanical cost and provide a slim design for LCDs.

The following findings are also revealed in DisplaySearch’s Q4’07 Large Area TFT LCD Product Plan Report:

• In 26” LCD TV panels, there are two camps: TN and VA/IPS.

• To better meet the strong market demand for 32” LCD TVs, panel makers are starting to use Gen 7 (1950 × 2250 mm) fabs or Gen 8 (2160 × 2460 mm) to produce 32” LCD TV panels.

• Low-brightness panels with fewer optical films and lamps in the backlight structure are in the product plans of panel makers.