Taiwan in 1999 for the first time will surpass Japan to become the world's largest supplier of notebook PCs.
The island's notebook manufacturers will ship nearly half of the world's total supply this year, according to estimates released last week by the Market Intelligence Center (MIC), a market research arm of Taiwan's Government-backed Institute for Information Industry.
Taiwanese makers will ship a total of nearly 9.4 million notebooks this year, making up 48.6 per cent of total worldwide shipments, and an increase of 53.7 per cent over the 6.1 million units they shipped in 1998, according to MIC estimates.
The production value of Taiwan's notebook industry, meanwhile, is expected to grow by just over 21 per cent in 1999 to reach $US10.2 billion, compared to $US8.4 billion last year, the report said.
The rapid growth is a sign that the world's leading notebook vendors increasingly outsource the manufacture of their products to Taiwan-based suppliers.
Japan's Toshiba earlier this year started to place notebook production orders with Taiwanese suppliers, the report noted, marking the first time the world's largest notebook PC maker has contracted out the manufacture of its flagship product line. Toshiba, however, is far from alone in tapping into Taiwan's manufacturing prowess.
Other leading vendors, such as Apple, Compaq, Dell, Hewlett-Packard and IBM, also rely on Taiwanese manufacturing partners for much of their notebook supplies.
In addition to notebooks, the MIC report also said that Taiwanese companies are the world's largest suppliers of a wide range of IT products, including scanners, monitors, PC motherboards, switching power supplies, keyboards and mice.
Taiwanese manufacturers this year, for example, will produce as much as 91 per cent of the world's total supply of scanners, and 64 per cent of PC motherboards, according to the report. Scanner shipments are estimated to reach nearly 22 million units, while motherboard production is expected to grow by 21 per cent to over 64 million units.
Buoyed by a nearly 20 per cent increase in global PC shipments in 1999, according to MIC's own estimates, Taiwan is expected to see the total production value of its IT hardware industry this year reach nearly $US40 billion, an increase of just over 18 per cent over last year's $US33.8 billion.
Nearly half of that output, how-ever, comes from offshore manufacturing centres, many of which are located in neighbouring China and Southeast Asian countries.
Taiwan's domestic IT hardware production value this year will increase by only 9 per cent to just over $US21 billion, as companies continue to move manufacturing operations to lower-cost locations overseas, the report noted.
Growth in Taiwan's domestic industry was also slowed down by the forced production delays caused by a series of deadly earthquakes that rocked the island in September. Underlining the island's growing importance as a key IT hardware supplier, the supply chain disruptions resulting from the island's production delays were felt throughout the PC industry.
Taiwan's 1999 domestic production value will still be high enough to allow the island to retain its ranking as the world's third-largest IT hardware manufacturing base, behind only the US and Japan, but ahead of Singapore, MIC said.
Fifth-ranked China, however, is expected to see its output value grow by 30 per cent this year to reach almost $US18.5 billion, according to MIC estimates. mic.iii.org.tw