08.17.2001
Quanta and Compal benefit from Dell result

• Development: Dell reported sales for notebook PC, severs and storage devices and services appeared stronger in 2Q01. The firm continues to lead the industry into a price war in efforts to gain market share.

• Analysis: Quanta’s shipment in 1H01 expanded around 70% YoY with a bulk of the contribution from Dell’s enhanced orders. We expect 40% of total shipments for Quanta in FY01 to be delivered to Dell. Compal is expected to ship two new models for Dell beginning in Sept. We forecast 2H01 shipment will rise 54% HoH.

• Primasia View: We believe Compal and Quanta have benefited the most from Dell’s increased outsourcing as the US firm continues to seek lower cost advantages.