Merrill Lynch & Co expects the Asian component market – excluding Japan – to pick up as companies rebuild inventories and satisfy demand in the wake of Windows98 release. Local currency devaluation means every dollar of profit is now worth much more in the region and as an example Singapore PCB supplier Compeq is experiencing 72% growth rates. Taiwan’s share of the world notebook manufacturing market is expected to climb from 30% last year to over 50% in the next couple of years. Compal Electronics Inc, which already makes most of Dell Computer Inc’s Latitude notebooks is also going to be making Hewlett-Packard Co and Fujitsu Ltd models too. Semiconductor capacity is still in oversupply even though the Korean companies have halted production at various times over the summer; they haven’t actually cut capacity. The brokerage thinks DRAM orders are expected to fall further going into 1999.
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