Compal to Raise Prices of NB PCs in Q2, 2008

Taipei, May 8, 2008 (CENS)--The Taiwan-based Compal Electronics Inc., the world's second-largest contract supplier of notebook PCs, has planned to raise quotations for the PCs in the second quarter of this year to reflect recent price hikes on raw materials, which have seriously eroded profits of the notebook PC manufacturing industry worldwide, according to Ray Chen, president of the company.

Chen indicated that since last year copper prices has sharply risen 80% so far, forcing the world's notebook PC industry to consider raising prices of all copper-made components and parts, adding that his company and its parts suppliers have resolved to adjust upward their quotations in the second quarter.

Chen also noted that Compal will soon negotiate with its clients of branded notebook PCs about its move to raise prices, and he is confident that will definitely support his company's move.

Compal projected its shipment of notebook PCs for the second quarter of this year to grow 10% from a quarter earlier to 6.8 million units, and forecast annual shipment to reach 32 million units, with 40% to be posted in the first half of the year and the remaining in the second half. Besides, the company estimated its first-quarter gross profit rate at 4.7% and combined gross profit rate at 5%. Also, Compal is expected to ship one million low-price laptops to Dell this year.

Chen said that except batteries and cases, supply of notebook PC parts and components will stay stable this year. Shortages of power supplies are expected to be solved in June; however, explosive demand for notebook PCs and low-price laptops may still tighten supply of the components in booming seasons.

On the other hand, to secure ample supply of both plastic and metal cases of notebook PCs, Compal has actively sought cooperation with more suppliers in Vietnam, and introduced new production machines into its newly acquired company, which is scheduled to supply 30-40% of annual required metal cases for Compal in the second half of this year.

Compal's Sales Performance
	Q1, 2008	Q4, 2007	Q1, 2007	Quarterly Growth	Annual Growth
Sales Revenue (billion)	NT$101.64	NT$116.22	NT$96.98	-13%	5%
Gross Profit Rate	4.7%	4.9%	4.8%
Operating Income Margin	2.7%	3.4%	3.4%
Pretax Profits (billion)	NT$3.959	NT$5.051	NT$3.132	-22%	26%
Net Profits (billion)	NT$3.209	NT$4.146	NT$2.601	-23%	23%
Earning per Share	NT$0.84	NT$1.09	NT$0.69

Source: Compal Electronics Inc.