- Although the spread of SARS is anticipated to force a 15% to 20% drop in Chinese PC market demand, China accounts for 9% of the global PC market and 15% of Greater Chinese motherboard shipments. Given that majority of Greater Chinese motherboards are shipped to Europe, North America, or other locales, impact from SARS is light. Second quarter shipments forecasts have thus been adjusted downward by 400,000 units to approximately 24.6 million units, a 15% drop from the first quarter of 2003.
SARS has kept consumers out of electronics malls, but is stimulating consumer demand for PCs sold by large brand-name vendors with full, well-established distribution and sales networks. The Chinese clone market has hence borne the brunt of SARS, which bodes ill for Taiwanese motherboard makers aiming to expand their clone businesses.
At present roughly 70% of Greater Chinese motherboard industry production takes place in China, and in the short term makers are not considering moving production to Taiwan or other areas outside of China. In addition to strict controls on site entrance, makers have stepped up sanitation and disinfections in factories and dormitories, as well as cut down on the flow of employees traveling between Taiwan and China. Although up to now SARS has not impacted Greater Chinese motherboard supply chains, in order to minimize possible future impact motherboard makers have begun raising inventory levels by two to four weeks during the second quarter of 2003.
If SARS is brought under control in affected regions throughout Asia, supply lines remain unaffected, and global demand outside of China sees an upswing, Greater Chinese motherboard shipments are expected to grow 20% from the second quarter to reach 29 million shipments in the third quarter of 2003. Before the start of the second quarter, numerous chipsets had been rolled out, affecting Greater Chinese motherboard ASP. This effect is anticipated to heat up in the second half of 2003, fortifying motherboard ASP and shipment value.