02.14.2001
Picvue to continue to benefit from strong demand for PDA

• Picvue (2333 'Bi You') has confirmed that a Palm (US) order for Palm III was transferred to Samsung (Korea) in 2H00. Given that Picvue's monthly revenues achieved record highs for six consecutive months since June last year, it would seem the transfer did not affect capacity utilization or overall performance. In fact, Palm and Handspring (US) orders are currently stretching the company in terms of capacity.

• We do not expect capacity on monochromatic STN-LCD to improve significantly this year, pushed up only slightly by increased yield. The new production line for color STN-LCD is expected to go to mass production from 4Q01.

• PDA makers Palm and Handspring started looking for additional STN-LCD panel suppliers last year as they expect PDA shipments to surge on strong demand this year. Palm has four STN-LCD providers on board, namely Picvue, Samsung, Philips and Epson (Japan). We believe Picvue will continue to benefit from strong demand for PDA thanks to its good relationship with Palm and Handspring and long exposure in STN-LCD.

• Picvue has indicated the new Palm V and Palm BST, expected to start shipment in March, will fill out spare capacity originally intended for Palm III. We consider that capacity utilization is a not problem for Picvue, although the touch panel shortage may have a negative impact on PDA shipment.

MarthaChen@Primasia.com +886-[0]2-2547-8878