Taiwan DSL CPE Shipment to Grow 7.1% in 2010

Although the second half of 2009 saw obvious shipment growth and the overall DSL industry is expected to see further progress in 2010, the problem of component shortages in the DSL industry remains, according to the Taipei-based Market Intelligence & Consulting Institute (MIC). Moreover, various contract manufacturers have placed excessive orders for chipsets, which has posed a heavy burden on the chipset suppliers. Furthermore, due to conservative market outlook, chipset suppliers have been adjusting their shipment strategies even in the first quarter of 2010, which has affected actual chipset shipments. In addition, due to the Lunar New Year holiday in the first quarter, shipments of chipsets and other components as well as operations of production lines were expected to be affected. Therefore, it is projected that Taiwan's DSL CPE industry shipment will drop about 16 percent to 12.37 million units in the first quarter of 2010, with shipment value reaching $326.5 million. In the second quarter, with the results of telecom bid projects revealed, it is expected that shipment volume will pick up and rise to approximately 13.64 million units, with shipment value reaching $358.3 million.

Overall, the full-year shipment volume is expected to be around 55.05 million units in 2010, growing 7.1 percent compared with 2009. DSLAM shipment volume is expected to reach about 2.73 million ports in full-year 2010.

As network deployments in emerging markets accelerate in light of economic recovery and continuing subscriber base growth, Taiwan's ODM and OEM shipments were rejuvinated. Consequently, the share of value-line wired DSL modem and wired DSL router shipments in Taiwan's overall DSL CPE industry grew to 32.5 percent.

Demand for wireless DSL routers continued to increase; boosted by Chinese branded vendors' orders, Taiwanese wireless DSL router shipment volume saw roughly 11.4 percent year-on-year growth in the fourth quarter and accounted for 41.6 percent of the overall shipment volume. Owing to the economic recovery in Europe, major European telecom operators began increasing their IAD orders. Therefore, IAD shipment volume grew by 10.9 percent sequentially and nearly 20 percent year-on-year, with shipment share reaching 26 percent. Moreover, as the demand for integrated Wi-Fi 11n products was on the rise in Europe, the ASP (Average Selling Price) of IAD increased to $41.8.

The ASP of wired DSL modems and wired DSL routers dropped to $10.1 and $12.3, respectively, nearing the lowest acceptable level. Although Wi-Fi 11n has not yet become mainstream, some manufacturers have increased the share of 11n wireless DSL routers in their overall shipments, thereby preventing their ASP from further declining. In the fourth quarter of 2009, Taiwanese DSL CPE ASP stood at $26.6, inching up 1.3 percent year-on-year. Taiwan's DSLAM shipment volume, meanwhile, merely reached 688,000 ports in the fourth quarter.

MIC