09.27.2001
D-Link receives ADSL modem contract from Japan

• Development: D-Link confirms receiving its all-time largest ADSL ODM modem contract from a Japanese electronics conglomerate. 15k will ship in 4Q01, with prospects for follow-up orders of 1m lines.

• Analysis: According to D-Link, the 15k ADSL modems will go for a unit price of US$85, 35% higher than the price on Ambit’s (2386.TT) Chunghwa Telecom (2412.TT) deal. We estimate a 22% gross margin on this contract and NT$440m in revenue contribution.

• Primasia View: We are positive about this contract as Japanese electronics companies tend to commit to long-term relationships.