Oct 28, 2001

According to Victor Tsan, managing director of the Market Intelligence Center (MIC), exports of IT products will likely decline by 15% this year. The MIC's previous forecast showed an 8% decline, while to new downward moficiation is due to consumer resistance following the recent terrorist attacks in the US.

The U.S. is not only the largest buyer of Taiwan's IT products, it is also a major supplier of high value key components and industrial raw materials to Taiwan's IT industry. The US annually takes 30 t0 40% of Taiwan's total IT exports.

The institute said that obstacles in air traffic would delay delivery of key components and result in soaring component costs. Beside general deterioration of the world economy, the worst factor at the moment is the continuously weakening U.S. consumer confidence in the wake of the terrorist attacks, while the US economy is already suffering from a general downturn since two years, having lead to massive spending cuts by consumers and corporate users.

According to the MIC, in the first half of this year, the share of the US in Taiwan's IT exports accounted for 39% of the desktop PC exports; notebook computers 39,8%; severs 30 to 35%; PC motherboards 22.1%; CRT monitors 38.5%; LCD monitors 21.8%; CD-ROM drives 32.1%; digitral cameras 64.2%; and TFT-LCD panels 30%.

Taiwan exported 2.48 million notebook PCs and 4.68 million desktop PCs in the first half of this year, PC motherboards 8.05 million pieces; CRT monitors 8.66 million sets; digital cameras 3.15 million units and TFT-LCD panels 1.2 million pieces.

The MIC had previously forecast that the IT market would have recovered in the fourth quarter but has revised this expected due to the WTC incident.

The weakened consumer confidence may also hurt DRAM an SRAM makers. Leading memory chip suppliers reported that prices of 128 Mb SRAMs declined to US$1,28 from its previous threshold price of US$ 1,30.