Recovery in IT spending brings surge in hardware orders

Orders for IT hardware from Taiwanese manufacturers have surged to record levels and the average selling price (ASP) has increased for many products in recent months thanks to an improving economic environment and a gradual recovery in corporate IT spending, according to Market Intelligence Center (MIC), a government-backed market research firm in Taipei.

Taiwanese hardware makers are the manufacturing backbone of the IT industry and an important barometer of demand from major vendors, including Hewlett-Packard Co. and Dell Inc.

Overall, hardware shipments from Taiwanese manufacturers are hitting levels not seen in years as orders climb for a range of IT hardware products, including digital still cameras, flat-panel displays, notebook PCs, desktop PCs, servers, motherboards, optical disc drives and mobile phones, according to MIC.

This increase in shipments is due to an improved economic environment and a gradual recovery in corporate IT spending, the research firm said.

Desktop PC shipments from manufacturers in Greater China rose by 18.9 per cent on an annual basis during the third quarter to 7.5 million units, a level that has not been seen since 2001, according to MIC. In dollar terms, the value of third quarter shipments rose 26.2 per cent from US$1.7 billion to US$2.1 billion, it said, noting that demand continues to grow “unabated.”

Shipments of notebook PCs climbed higher during the third quarter, growing 37.6 per cent to 6.4 million units, a record high, MIC said. The value of those shipments also soared, up 22.4 per cent to an historic high of US$4.2 billion, it said.

Server shipments also reached a record high during the third quarter, with unit shipments reaching 445,000 units, an increase of 21.4 per cent compared with the same period last year, MIC said. While the ASP of servers dropped during the third quarter, the value of those shipments reached US$381 million, an annual increase of 18.3 per cent, it said.

Taiwanese hardware makers posted strong increases in unit shipments for digital still cameras, up 118.1 per cent to 4.8 million units; motherboards were up 24.3 per cent to 33.8 million units; thin film transistor liquid crystal display (TFT-LCD) panels were up 68 per cent to 9.5 million units; optical disc drives were up 35.3 per cent to 26 million units; and mobile phones were up 24 per cent to almost 10 million units, MIC said.

Strong demand from vendors has led to shortages of some components, resulting in higher costs or a slowdown in the decline of prices, MIC said.

A shortage of TFT-LCD panels and batteries continued during the third quarter and resulted in higher component costs for notebook manufacturers, MIC said. This has raised notebook PC costs and is likely to slow a drop in prices, MIC said. Nevertheless, notebooks still showed a 0.9 per cent drop in ASP during the third quarter, it said.

A range of products, however, saw an increase in ASP during the third quarter. The ASP for desktop PCs, for instance, was up 4.9 per cent, while motherboards rose 3.8 per cent and TFT-LCD panels 6 per cent, MIC said. The ASP for mobile phones also rose during the third quarter to the highest level in nine months, spurred higher by a greater percentage of phones incorporating colour displays and digital cameras, it said.