Taiwanese Satellite Communications Suppliers See Influx of Orders for LNB Converters

2008/07/21 | By Steve Chuang

Taipei, July 21, 2008 (CENS)--Thanks to growing demand for LNB (low noise block) converters in the U.S., Taiwanese satellite communications manufacturers, including Prime Electronics & Satellitics Inc., Zinwell Corporation, Wistron NeWeb Corp., Microelectronics Technology Inc., have seen an influx of orders for the products starting July and are expected to post quarterly sales growth of between 5% and 10% in the third quarter, according to company sources.

With smooth supply of cables for satellite TVs, U.S.-based suppliers have placed increasing orders with their Taiwanese contract suppliers of LNB converters starting July.

Some industry insiders noted that DirectTV Inc.'s move to launch its new satellite in July 2007 did stimulate demand for LNB converters, and thus drove up Taiwanese suppliers' sales of the products at the time. However, a demand slowdown has continued this year as the market for LNB converters has turned saturated year by year.

But, Zinwell indicated that demand for LNB converters is very likely turn strong starting August due mainly to resilient demand of DirectTV and in the European market. The company projects its single-month sales of satellite TV peripheral devices, including LNB converters and STBs (set-top boxes), to contribute more than 50% to its total sales in the second quarter of this year. Also, Institutional investors estimated the company's single-month revenue to reach NT$550 million in the second half of the year.

In the meantime, while continuing to focus its business operation on STBs this year, Prime remains conservative about its sales of LNB converters in August and September. But, the firm has received more orders for LNB converters in July than in June, and an LNB converter demand turnaround in the European market will also prop up its sales in the third quarter.

Sales Performance of Taiwan's Connector Suppliers in 1^{st Half of 2008}
^Company	^{EPS for Q1}	^{Net Profit for Q1}	^{Growth Rate in Sales Revenue for Q2}
^{Cheng Uei Precision Industry Co.}	^NT$1.09	^{NT$439 M.}	^5%
^{P-two Industries Inc.}	^NT$0.56	^{NT$60.22 M.}	^24.27%
^{I-Sheng Electric Wire & Cable Co., Ltd.}	^NT$0.94	^{NT$118 M.}	^18.47%
^{Cvilux Corp.}	^NT$1.15	^{NT$60.18 M.}	^6.98%
^{Solteam Electronics Co., Ltd.}	^NT$0.65	^{NT$20.85 M.}	^34.22%

^{Source: Companies}