Taiwanese data communications industry shipment value is estimated to have reached US$781 million in the third quarter of 2003. WAN (Wide Area Network) products, including NIC (Network Interface Cards), hub/switch, WLAN (Wireless LAN) NIC, WLAN AP (Access Point), and SOHO (Small Office/Home Office) router accounted for 54% of total third quarter value, with 46% made up of local area network products (LAN) such as analog modems, xDSL (Digital Subscriber Line), and cable modems.
In terms of total third quarter LAN shipment value, NIC made up 5.8%, switch/hub 24.1%, WLAN 46.9%, and SOHO router 23.2%. Compared to the second quarter WLAN shipment share continued to increase, while the others registered shipment share declines. However, LAN device shipments grew sequentially owing to the traditional peak-buying season in the third quarter. NIC grew by 3.8%, switch/hub 3.9%, WLAN 26.2% and SOHO router 9.9%. Steady PC shipments allowed NIC shipment volume to grow, while switch/hub shipment slightly increased because of the gradual rise in corporate profits. SOHO router growth was aided by the increased worldwide broadband penetration rate. The speedy increase in home application led to sustained growth in WLAN shipment volume.
WLAN shipment volume reached 8.8 million units in the third quarter of 2003, with shipment value totaling US$196.8 million. WLAN NIC shipment volume grew to eight million units, and WLAN AP grew to 995,000 units, a new high recorded for both products. The Wi-Fi Alliance announced the certification of 802.11g products in July 2003, thereby speeding up 802.11g replacement of 802.11b and slowing the decline in ASP (Average Selling Price). Second-tier players are expected to withdraw from WLAN competition as diverse product specifications raise technological barriers and lower prices intensify scale-competition.
For third quarter 2003 WAN shipment value, analog modem had a 29.9% share, xDSL 51.7%, and cable modem 18.4%. Analog modem shipment volume grew 17.8% sequentially because of brisk PC shipment in the third quarter. Aided by large-scale tenders in China and France, and steady orders from Japanese and West European operators, xDSL shipment volume grew 19.3%. Cable modem shipment volume declined sequentially 5.2% as leading international vendors overordered during the second quarter and worked to clear inventories in the third quarter.
Looking towards the fourth quarter of 2003, the holiday season is expected to prod demand, pushing shipment growth for WLAN, NIC, hub/switch, SOHO router, and analog modem. Nevertheless, because the shipment volume for Taiwanese manufacturers is anticipated to peak in November and begin to taper off in December, fourth quarter growth will not match the previous quarter. It is forecasted that NIC will grow by 2.1%, WLAN 18.9%, hub/switch 1.1%, SOHO router 8.3%, and analog modems 10.8%. xDSL shipment is expected to sequentially decline by 9.8% due to the conclusion of large-scale tenders from global operators in the third quarter, and shipment will depend on small volume contracts. Cable modem shipment will likely grow 13.2% as leading international vendors following inventory liquidations and as demand in the North American market heats up.