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‘Global computer industry will recover by Q3’

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CIOL Bureau
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Baker Li

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TAIPEI: The head of Taiwan's First International Computer Group said the

struggling global computer industry could see a recovery, as soon as inventories

dwindle and demand picks up during the traditional peak season for computer

sales. "Since the first quarter, high inventories have been mostly

absorbed. Plus, everybody has been very conservative (with inventories) in the

second quarter," Ming Chien, the group's chairman, told Reuters on the

sidelines of a news conference on Thursday.

"We believe the industry will regain momentum in the third quarter, and

the fourth quarter will be the best," Chien said. He said First

International Computer had no current inventory problem. "As an OEM

(original equipment manufacturing) maker...we don't have much inventory,"

Chien said. "We just prepare materials we need for orders we

received," he said. He, however, refused to elaborate on his statement.

Taiwan's contract chipmakers have said they see the PC sector climbing out of

a broad tech slump first, which would lead a tech recovery as the

telecommunications and wireless sector continued to languish. Before the

pick-up, however, Chien said the industry would still experience a slow second

quarter.

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First International Computer, the group's flagship company, has said it

expected to generate sales of T$60 billion in 2001, up from T$52 billion in

2000. The company gave no earnings and output forecasts. Multex The Estimate

Directory consensus forecast for FIC's 2001 net profit was T$611.9 million with

earnings per share at T$0.50.

Eyeing the 3G technology



Nevertheless, the FIC group was also venturing into the telecommunications
industry. "We just signed a deal with Qualcomm last week to from a

strategic alliance to pave the way for our 3G business in the future, and we

want more foreign and local telecom operators to join us," Chien said,

referring to its telecom unit.

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Qualcomm has taken a 15 per cent stake in 3GO Company Ltd, a FIC telecom

unit, capitalized at T$15 billion, Chien said. FIC owns a 30 per cent stake in

3GO and the remaining 55 per cent will be available for potential partners. FIC

will try to win one of the five third-generation (3G) wireless

telecommunications licenses, Chien said.

Taiwan's transportation and communications ministry said last month it would

submit a plan to auction five 3G wireless telecommunications licenses for

cabinet approval. The ministry would propose the plan to the cabinet as soon as

possible but declined to give a timetable or disclose the type of auction that

would be used to sell the licenses.

Third-generation mobile technology is expected to transmit high-speed

Internet access, video and CD-quality music over mobile telephone airwaves.

Operators known to be interested in a Taiwan 3G license, include Chunghwa

Telecom and Taiwan Cellular, Taiwan's biggest wireless service firm, as well as

firms run by Hong Kong tycoon Li Ka-shing.

Other contenders are Far EasTone, a unit of Far Eastern Textile, the Lin Yuan

Group, parent firm of Cathay Life Insurance, and KG Telecom, the mobile phone

service arm of the Koo's Group conglomerate.

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