TAIPEI Technology companies feeling the pinch from Europe's debt crisis could face a tough sell when industry buyers gather in Taipei to examine the latest whizz-bang features at the world's No.2 computer fair.
Some major exporters in Asia including Sony Corp and Asustek Computer Inc have recently told similar tales of woe about the weak euro, which threatens to hurt PC sales in the sector's typical second-half uptick.
Another worry is China's move to put the brakes on an economy that grew 11.9 percent in the first quarter.
At present, the technology sector is not a target but analysts worry that any further credit tightening may eventually hurt demand, and China may restrict loans to parts makers, which supply the China-based factories owned by Taiwan companies.
"That could be a double blow," said Yuanta Securities analyst Vincent Chen, referring to Europe and China, which together take about half of Taiwan's total exports. "There should be a lot of design-ins at the show but we are not sure if there will be a lot of orders for them."
The mood in Taiwan is a good benchmark for the global PC industry as the island's contract makers work for the world's top brands such as Hewlett-Packard Co, Dell Inc and Apple Inc, and make most of the world's laptop computers.
Yuanta said it cut its 2010 and 2011 forecasts for global personal computer shipments by 3 percent and 2.3 percent, respectively, to 336 million units and 370 million units, but they were still higher than 306 million PCs shipped in 2009.
At this year's Computex, which runs from June 1-5, one of the much-hyped products would be portable tablet computers as hardware makers hope to take advantage of the buzz surrounding Apple's newly launched iPad.
The iPad hit overseas store shelves on Friday, with buyers storming Japanese and Australian shops to be among the first outside the United States to snap up the long-awaited tablet PC.
At Apple's flagship store in Tokyo's Ginza shopping district, about 1,200 people formed a line that stretched some 800 meters.
Acer Inc, Micro-Star International Co (MSI), Asustek Computer and China's Hanwang Technology Co are set to showcase their own tablet designs and electronic reading devices, or e-books.
These tablets, with bright LCD touchscreens, longer battery lives and wireless connectivity, will share the stage with a line of high-end all-in-one desktops and sleek laptops that allow users wearing special shutter glasses to play 3D games.
"There are some noises about Europe but we still expect to see a good third quarter after we launch new products," said MSI Chairman Joseph Hsu, whose company produces PCs and motherboards.
Technology demand typically picks up in the third quarter with back-to-school demand and pre-Christmas buying.
Taipei's organizers said a total of 1,715 exhibitors, including foreign technology heavyweights such as Microsoft Corp, Intel Corp, Advanced Micro Devices Inc and Nvidia Corp, would attend the PC show this year, slightly more than last year.
Some of them will be promoting new processors that power laptops and other high-tech gadgets using ultra high-speed WiMax technology.
(Editing by Chris Lewis and Valerie Lee)