Taiwanese notebook PC ASP (Average Selling Price) saw a slight downward trend in the second quarter, owing to a larger share of lower-priced models. Yet the slide was light, allowing the jump in volume to realize a 30.5% year on year rise in shipment value. Shipment value amounted to US$4.9 billion, growing 8.2% from the first quarter of 2004.

The Centrino effect, which began growing in earnest in the second half of 2003, continued to drive the market. Pentium M models comprised nearly half of all Taiwanese notebook PC shipments in the second quarter, dramatic growth from close to 40% in the first quarter of 2004.

Emphasizing low power draw and mobility, the Centrino fueled the mounting trend for slimmer models, ultimately giving rise to a higher share of two spindle notebook PCs. Two spindle volume grew 26.1% sequentially in the second quarter, while the all-in-ones typically targeted at the desktop replacement segment saw a 9.2 percentage point retreat.

With the continued fall in all-in-one share and limited growth in models with displays 15" and larger, the desktop replacement segment repeated the poor performance seen in the first quarter. Contrary to original expectations, the desktop replacement effect failed to play an important driving role in the first half of 2004.

First and second tier Taiwanese notebook PC maker volume continued to grow in the second quarter due to orders from Dell, outsourcing of consumer models by Toshiba, and contracts from HP, which gained some relief from inventory issues.  However, some second tier players dropped to the third tier owing to a drop in business from top-ten brand-name vendors. The consequent shift in shipment volume rankings led to shipment growth of the third tier grouping.

The third quarter of 2004 will see the arrival of the back-to-school effect. Furthermore, price cuts on some low-power Intel processors will surface, and LCD (Liquid Crystal Display) panel suppliers have also been boosting capacity. These developments are expected to facilitate ambitious price cuts on notebook PCs, which should generate an upswing in demand. With global market scale continuing to build, Taiwanese notebook PC industry volume is anticipated to see a 33% year on year climb and a 14.1% sequential increase in the third quarter of 2004.