According to Market Intelligence Center (MIC), in the fourth quarter, due to the Christmas peak season effect, demand for consumer electronics in the European and US markets was very strong. Meanwhile brand-name vendors, such as Dell, HP, and Acer, continued to roll out value-line notebook PCs, also stimulating the market. In addition, shortages of key components, such as panels, hard disk drives, and chipsets, which plagued the industry in the third quarter, were gradually being solved in the fourth quarter. As a result, the Taiwanese notebook PC industry saw its shipment volume hit approximately 15.2 million units in the fourth quarter of 2005, up 45.6% year-on-year and 13.9% sequentially.

Due to a pickup in panel prices and slowing price declines of key components, such as optical disk drives and hard disk drives, ASP (Average Selling Price) of Taiwanese notebook PCs in the fourth quarter fell less than in previous quarters, hitting US$601. Owing to the continuous growth in shipment volume, shipment value of Taiwanese notebook PCs hit US$9.1 billion in the fourth quarter, up 34.9% year-on-year and 12.8% sequentially.

Meanwhile, in the first half of 2006, panel makers are expected to re-allocate their capacities, increasing the supply of notebook PC panels, which might drive down panel prices in the first half of 2006 and facilitate the launch of new value-line notebook PC models. The Taiwanese notebook PC industry is expected to reach a shipment volume of 12.9 million units in the first quarter of 2006, up 35.6% year-on-year but down 15.3% sequentially.

Intel already rolled out its dual-core Napa platform in January of 2006 and brand-name vendors, such as Acer, HP, Dell, are scheduled to launch models featuring the Napa platform in the first quarter. However, due to IC substrate supply and packaging problems for Intel CPUs (Central Processing Unit) and chipsets, it is expected that mass supply of these components will not be available until the second quarter. Since prices will remain high in the short term, Napa replacement demand is anticipated to still be limited in the first half of 2006 and will only become evident in the second half of the year.