International brand-name players released more orders to Taiwanese makers, leveraging their heightened competitive edges such as full-system design capability, worldwide assembly sites, and global logistics. Taiwanese share of global shipments thus climbed from 25.6% in the second quarter of 2003 to 29.1% in the second quarter of 2004.

Shipment value totaled US$2,193 million in the second quarter of 2004, growing 25.1% year on year from US$1,753 million, yet fell 4% sequentially. In addition to the decrease in shipment volume, falling prices also contributed to the larger drop in shipment value. Desktop PC ASP (Average Selling Price) fell sequentially to US$275 due to two factors. First, the second quarter marked a transitional period from end-of-life models to newer ones. Second, weakening demand in the PC market depressed costs of key components and raw materials.

In the third quarter of 2004, the strong retail season and increased back-to-school demand are expected to provide further traction for Taiwanese shipments. Additionally, PC platforms began undergoing transition at the end of the second quarter. Intel is replacing socket 478 with LGA775. DDR (Double Data Rate) is shifting to DDR2. PC architecture is also moving from PCI (Peripheral Component Interconnect) to PCI-Express.

Leveraging this window of opportunity, Taiwanese makers are securing contracts for new models with superior full-system design capability to international EMS (Electronic Manufacturing Service) providers. As shipment share of next-generation platforms increases in the third quarter, Taiwanese share of global desktop PC shipments is expected to expand. Therefore, driven by seasonality and more orders from brand-name vendors, Taiwanese desktop PC shipment volume is expected to grow 12.1% year on year to approximately 8.6 million units.