Demand for NB PCs to Exceed Supply of Plastic Cases in August

Taipei, May 14, 2008 (CENS)--Explosive demand for consumer notebook PCs will likely see demand for plastic cases for NB PCs exceed supply in August, forcing notebook PC makers now to urgently secure stable supply of the parts, according to institutional investors

Such scenario is expected to benefit Hon Hai Precision Industry Co., Ltd. and Benten International Ltd. who both have advanced production capability for high-end plastic cases.

According to statistics compiled by IDC (International Data Corp.), unaffected by U.S.'s sub-prime-mortgage turmoil, global sales of notebook PCs in the first quarter of this year surprisingly grew nearly 37% from a year earlier, with consumer models accounting for an enormous proportion. This causes possible shortages of plastic cases worldwide, as consumer models are practically all built with plastic cases.

Among world's leading makers of notebook PCs, Compal Electronics Inc. pointed to a shortage of plastic cases that has driven the company to set up a joint venture with its subcontract suppliers in Vietnam to turn out the parts. Also, Quanta Computer Inc. independently built a production plant for parts last year, while Wistron Corporation has decided to work with Benten to overcome such shortage of plastic cases.

In the second quarter global shipment of notebook PCs is expected to stay as strong as in the first quarter, tightening supply of notebook PC cases in the quarter. Futhremore, shortages of the parts, especially models made through IMR (in-mold reprint) technology, may worsen starting August, when a seasonal boom hits the notebook PC industry.

In fact, since HP unveiled its high-profile Pavilion series notebook PCs, which all adopt IMR-treated plastic cases, such plastic cases have been well received among world's leading notebook PC brands, including Asus, Dell, Toshiba and Acer. However, Taiwanese plastic case makers who are capable of mass producing IMR cases include only Benten and Hon Hai Group.

In the meantime, popularity of plastic cases may threaten magnesium and aluminum-alloy case makers, who had experienced hot sales of the products over the past few years. Also rising labor costs have heavily impacted suppliers of magnesium and aluminum-alloy cases in China, forcing some notebook PC makers, including Compal and Pegatron Corp., to consider increasing in-house production capacity of the parts.

Demand for magnesium and aluminum-alloy cases may be sharply cut this year due partly to Dell's adoption of plastic cases instead of metal ones for its consumer notebook PCs, as the brand last year faced quality troubles caused by such cases, as well as partly to Apple Inc. who plans to remake its iPhone with plastic cases.