In the first quarter of 2004, analog shipment volume was approximately 14 million units while shipment value reached around US$109 million, falling sequentially 6.5% and 14.7% respectively. Global PC shipment volume suffered a sequential 9% drop in the first quarter of 2004. In addition, notebook PCs, nearly all of which are equipped with built-in analog modems, experienced reduced orders due to increased inventories in the North American retail channels, dragging down Taiwanese analog modem shipment in the first quarter of 2004.    

Taiwanese xDSL shipment volume rose 13.2% sequentially to reach approximately 6.9 million units in the first quarter of 2004, while shipment value also climbed 10.4% to approximately US$ 194.4 million. First-quarter shipment growth was driven by three factors. First, first-tier makers continued to receive orders from brand-name equipment vendors; shipments to Japan and Europe were increasing steadily while shipment to North America also recorded substantial growth. Second, Taiwanese makers continued shipping ADSL (Asymmetric Digital Subscriber Line) routers to European carriers, further accelerating total shipment volume. Lastly, spurred by carrier price reductions, the Chinese ADSL market experienced rapid growth, thus encouraging Huawei, ZTE, and provincial carriers to release more orders to Taiwan. Growing shipment share of high-end wireless ADSL routers also slowed the ASP (Average Selling Price) slide. As a result, the first quarter of 2004 saw Taiwanese ADSL shipment render a stellar performance both in volume and value.

Cable modem shipment volume posted a slight 3.6% sequential drop in the first quarter of 2004, reaching approximately 2.1 million units. Shipment value also declined 0.7% to about US$75.8 million. Unable to meet the higher-than-expected global demand in the fourth quarter of 2004 due to insufficient materials, first-tier makers rectified the gap this quarter, generating sequential growth in shipment volume. After a high-performing fourth quarter of 2003, second-tier makers started to experience shrinking shipment volume due to weakening demand. As a result, Taiwanese shipment volume suffered a slight fall in the first quarter of 2004. As first-tier makers increasingly shipped wireless and VoIP cable modems, ASP was driven up to US$36.2, thus limiting its sequential fall to only 0.7%.

In the second quarter of 2004, enterprises are expected to display stronger upgrade demand than 2003, thus pumping up global shipment of corporate desktop and notebook PCs. As a result, analog modem shipment volume is anticipated to climb 1.7% sequentially to reach approximately 15 million units. Due to rapid growth in the Chinese market, first-tier Taiwanese makers' efforts to gain new customers, and the growing wireless ADSL router market, xDSL equipment volume is expected to continue its first-quarter momentum; xDSL shipment volume is anticipated to increase 7.8% to reach about 7.5 million units. Boosted by MSO (Multiple Systems Operator) expenditures that traditionally peak in the second quarter, Taiwanese cable modem shipment volume is forecasted to grow 10% to reach approximately 2.3 million units.