Strong demand for laptop computers and mobile phones with cameras is set to give Singapore's electronics suppliers a lift when they report fourth-quarter performances, analysts said.
The trend is expected to extend into the first quarter for chip makers and contract electronics manufacturers such as Chartered Semiconductor Manufacturing Ltd and Venture Corp.
In the December quarter, analysts expect Chartered, the world's fourth-largest supplier of made-to-order microchips, and sister company ST Assembly Test Services Ltd, to post higher sales on buoyant demand for computer and communications chips.
Last month, state-controlled Chartered forecast a 28-30 percent rise in fourth-quarter revenues from the third quarter and a smaller loss of US $40-$48 million, while ST Assembly is projecting a 5-10 percent increase in December quarter sales.
Chartered's narrower loss in the fourth quarter would mark its third straight year in the red. ST Assembly, the world's fifth-largest chip tester, is seen posting its second straight quarterly profit after 10 consecutive quarters of losses.
Chartered reports on January 30 and ST Assembly is due the same week.
Computer audio equipment giant Creative Technology Ltd and Venture, Singapore's largest contract electronics manufacturer, are likely to report a 24-25 percent rise in fourth-quarter net profits from a year earlier, analysts said.
"Q4 of last year should be a pretty good quarter for all four major suppliers. For Chartered and ST Assembly, it's higher communications and consumer-related demand, while for Creative, PC demand was stable with some boost coming from its new consumer electronics products," said Daiwa Institute of Research analyst Pranab Sarmah.
"The major growth driver for Venture in 2003 was the new customers and contracts it secured."
Venture reports on February 16, while Creative is yet to set a date.
For Chartered, ST Assembly and, to some extent, Venture, the good times will continue to roll in the January to March quarter, analysts said.
Chartered and ST Assembly are benefiting from a spill-over of orders from bigger chip suppliers in Taiwan, which are short of factory capacity ahead of the Lunar New Year next week, they added.
"The chip firms may not suffer the historical 10 percent quarter-on-quarter seasonal decline in Q1. We're expecting marginal growth instead," said Daiwa's Sarmah.
"There are shortages in high-end camera handsets and notebooks. Due to extended festive demand in markets like China and Taiwan, customers will continue to build inventory."
For Venture, increased outsourcing of production by companies to cheaper Asian locations will more than offset the traditional first-quarter slowdown, said Dharmo Soejanto, analyst at Kim Eng Ong Asia Securities.
"The outsourcing story is still strong, especially after the Sars outbreak earlier this year. There is added impetus for companies to improve their supply chain before the next major outbreak recurs," he added.
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