08.28.2001
Cheng Uei unaffected by Japan X-Box delay

• Development: The launch of X-Box in Japan will be postponed to Feb. 22, 02 as Microsoft claimed the delay would benefit Japanese sales if the gaming console proves to be a hit in the US market upon release in November.

• Analysis: Cheng Uei Precision, major beneficiary of X-Box’s outsourcing business, reported that shipment of X-Box peripherals will remain near 3m sets for ’01. We have conservatively assumed that only 2m sets will be delivered by year-end.

• Primasia View: As Cheng Uei remains sole supplier for specified peripherals for X-Box, we believe that any postponement of launch will only result in delayed shipment, but not cancellation. Consequently, we remain bullish on Cheng Uei’s outsourcing business with Microsoft.