Monica Chen, Taipei; Joseph Tsai

 

Pegatron Technology and Asustek Computer are set to host their third-quarter investor conference on October 27 and 31, respectively, with Asustek's Eee Pad Tranformer and Zenbook shipments to be the focus of the meeting. Meanwhile, Pegatron is also expected to explain how China's environmental reports about its subsidiaries that supply components to Apple, are creating pollution as well as how its 10 million iPhone 4S orders will affect its revenues in the fourth quarter of 2011 and 2012.

With Pegatron's three component subsidiaries that supply to Apple in China being accused by China's environmental report for creating pollution, Pegatron has responded that one of the subsidiary is currently purchasing equipment to eliminate both noise and waste gas released and the subsidiary will continue to proceed with replacing old equipment as well as having a regular maintenance schedule.

Meanwhile, Pegatron's other two subsidiaries, which were fined because of releasing polluted water, have already made improvements to its production lines and will continue to negotiate with local residents and government to resolve the situation.

For the third quarter, Pegatron is expected to break even or have a profit slightly with its notebook shipments including netbook and tablet PC, to have 20-30% sequential growth, while motherboard and desktop PC shipments will be maintained at the same level as the second quarter. As for its LCD TV, game console, and e-book reader business, the previous forecast believed that these product lines' shipments will have several-fold increase with communication products including handsets to hold level sequentially.

Although iPhone 4S will start contributing revenues to Pegatron in the fourth quarter, since the gross margin may not be as good as expected, Pegatron is still expected to see losses for 2011.

For Asustek, the company originally expected its tablet PC shipments will reach 800,000 units in the third quarter, double from 400,000 units in the second quarter, but shipments have been affected by Amazon's Kindle Fire, so shipments are expected to only reach 600,000-800,000 units.