The 2003 Taipei International Computer Show (Computex Taipei 2003) wrapped up a successful five-day run on September 26, attracting over 22,000 international buyers and sparking a pre-Christmas buying frenzy.

According to China External Trade Development Council (CETRA), co-organizer of Computex Taipei 2003, the buyer turnout declined by 8.73% from last year, due mainly to the delayed schedule of the show. Yet the total number of visitors this year grew by 28.62% to 92,136 people, compared with the year before.

The biggest foreign buyer turnouts came from the U.S., Japan, Hong Kong, South Korea, and mainland China, CETRA reports. Unlike previous events, the number of European buyers decreased significantly this year.



According to CETRA and Taipei Computer Association (TCA), the other co-organizer, the exhibitor presence grew 12% from last year, to 1,241. They occupied 2,419 booths, an increase of 5%. Both numbers are record highs for Computex. All of the major information technology (IT) players were present at the show, including Intel, AMD, Texas Instruments, and National Semiconductor. A total of 135 foreign exhibitors from 19 countries manned 267 booths this year.

The event occupied all three exhibition halls at the Taipei World Trade Center (TWTC). The Taipei City Government recently completed the third hall on a site formerly used for parking, adding room for 500 extra booths. Additional booths were squeezed in by rearranging exhibition space on the second floor of the TWTC Hall 1.

Industry analysts say that Computex has several advantages over its major rival, Comdex Fall in the U.S., including proximity to global IT manufacturing bases in Taiwan and mainland China. This makes it easier for buyers to do business directly with manufacturers and to obtain first-hand product information.

According to Anand Lal Shimpi, president and editor-in-chief of AnandTech, a United States-based source of IT-hardware analysis and industry news, Comdex has evolved to be a consumer-oriented exhibit that draws more consumers than professional buyers. He noted that the show's shrinkage indicates that big international buyers have been staying away.



Computex Taipei 2003 had five theme pavilions, including the High-speed Connection Forum, Wireless, Security, Flat Panel Displays (FPD), and Integrated Circuit (IC) Design.


Ho ho ho
Despite the modest buyer decline, TCA says many pre-Christmas orders were placed for IT products, with computer peripherals and consumer electronic items such as digital cameras, digital versatile disc (DVD) players, liquid crystal display (LCD) TVs and portable hard disks topping buyers' shopping lists.

Local motherboard companies say that they did just "okay" at the annual show because most of them had few new items to promote. One of the few bright spots, they say, was mini barebone systems and home digital products, which are expected to become a mainstay in next year's market.

After the five-day event, most exhibitors say that the home digital and multimedia IT products are expected to generate more business for local hardware makers next year, though clear signs of an improved business climate remain elusive.

Industry sources say that Taiwan's IT industry has been gearing its products toward Intel's digital family and Microsoft's multimedia center concepts, which envision the PC as a multimedia hub that can link with consumer electronic devices and appliances over wireless local area networks (WLANs). Products developed in this area attracted intensive attention from global buyers at the show, including the mini desktop barebone systems demonstrated by Asustek Computer Inc., Shuttle Inc. and Micro-Star International Co.

Despite their average performance at Computex this year, major Taiwanese motherboard makers expect their fourth-quarter businesses to pick up, with sales anticipated to rise by about 10% in October and even higher in the remainder of the year. Computer makers also expect the uptick in the notebook PC market, especially for Centrino powered models, to continue through the fourth quarter.

Software
Most of the software exhibitors at the Computex Taipei 2003 expressed satisfaction with their results at the show, with many big names reporting a revival in purchasing interest.

Microsoft praises Computex as a good platform for interaction between companies and consumers. Eddie Wu, senior director for Microsoft's embedded systems group in Asia says that his company jointly demonstrated many embedded products at the annual show in conjunction with 11 local contract makers, including set-top-boxes, storage products, SmartPhones and personal digital assistants (PDAs).

Other software exhibitors, such as Ulead Systems Inc. and CyberLink Corp., say that their sales at the event were about 10% to 20% higher than the previous year as their newly unveiled software products fit well with the wireless Internet-access and digital home trends. Both companies received serious inquiries for possible cooperation and orders.


Global Production Center

According to the Market Intelligence Center (MIC) of Institute for Information Industry, Taiwan has leveraged its solid industrial infrastructure and global supply chains to turn its IT industry into one of the most important manufacturing lines on the island.

With IT production value of US$47.8 billion in 2002, Taiwan is the fourth-biggest supplier of IT goods trailing the U.S., mainland China and Japan. The MIC estimates that Taiwan's IT industry is expected to grow to US$52.1 billion next year.

The local IT industry has grown at a compound growth rate of 9.6% in the past five years. Last year, 63.7% of the industry's output was produced offshore as most local IT hardware makers have moved their production to the other side of the Taiwan Strait.

Last year, the island's overall manufacturing industry index grew by 8.1%, with the IT/electronic sector outshining others with a ratio of 13.4%.

Both notebook PCs and computer monitors, including both cathode-ray tube (CRT) and liquid crystal display (LCD) models, remained the mainstay products in the local IT hardware industry, generating a combined production value of US$24.1 billion last year, or about half of the island's total annual IT hardware production value.

As LCD monitors are replacing CRTs on the desktop, Taiwan's LCD monitor output has surged by an average of 71.7% in the past two years. LCD production outpaced CRT monitor output for the first time last year.

In order to confront the fierce price competition, Taiwan IT maker have been moving their production overseas, especially to mainland China, to lower costs, according to the MIC. This trend has led to structural changes in the local IT sector, which is increasingly focusing on marketing, R&D and high-end manufacturing, while leaving production of lower-end IT and electronic products to mainland factories.

The MIC says that Taiwan has gradually transformed from a manufacturing center into a global supply center of market information as well as communications and consumer electronic products. It is also evolving to become a global electronic product operation center.

Table 1:

Status of Taiwan's IT Industry in 2002
Product	Global Rank	Global Share	Top Maker
Notebook PCs	No.1	61%	Quanta Computer Inc.
Desktop PCs	No.1	90%	Elitegroup Computer Systems Co., Ltd. / HonHai Group
Servers	No.2	30%	Inventec Corp.
CDT Monitors	No.1	51%	TPV Technology Ltd. (AOC)
LCD Monitors	No.1	61%	BenQ Corp. (formerly Acer Communications& Multimedia Inc.)
Optical Disk Drives	No.1	30%	Lite-On IT Corp.
Digital Still Cameras	No.2	39%	Premier Image Technology Corp.