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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > Technology > Article Home Business & Finance News U.S. Politics International Technology Internet Entertainment Sports Lifestyle Oddly Enough Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Slowdown, shortages in focus at Computex Sun May 31, 2009 1:34am EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Baker Li TAIPEI (Reuters) - A shortage of electronic components such as chips and displays threatens to derail a nascent recovery in Asia's technology sector spurred by China's stimulus plan. At the Computex trade show in Taiwan this week, electronics companies including Acer and Asustek Computer will showcase their latest gadgets to tempt buyers wary of spending as a global recession pinches. In the last few months, China's $600 billion stimulus spending has driven a recovery in Asia's tech sector, especially in Taiwan, as China moulds itself into an electronics consumer and not just an exporter. But many tech companies, especially makers of memory chips and displays, have sharply trimmed output since late last year or were too cash-strapped to invest in new production equipment in the sector's downturn, leading to shortages of key components. "Tight supplies are creating a headache for many computer vendors," said Alex Huang, vice president of Taiwan's Mega International Securities. "So it remains a question mark if you ask me how strong the recovery will be in the next few months." AU Optronics Corp, the world's No.3 maker of LCD panels for PCs and flat-screen TVs, said it has a shortage now and can only meet 70 percent of its orders even if it runs at full capacity in the next three months. It's a double blow as many leading PC companies have seen their profit margins weaken as they sell more cheaper netbooks -- some of them small enough to slip into a purse. As prices of displays and memory chips rise due to supply shortages while demand remains lukewarm, Merrill Lynch expects PC vendors to face more pressure on margins from this quarter. Research firm IDC has forecast worldwide PC shipments will fall 4 percent this year. A total of 1,712 exhibitors will attend the June 2-6 show in Taipei, slightly fewer than last year. Many Chinese buyers, including Lenovo Group and Sichuan Changhong Electric, will also shop for new gadgets at the show. "For us, China is a very important market, where growth will be faster than any other major market," said J.J. Wang, a vice president of Dutch NXP Semiconductor. ULTRAPORTABLE Mobility will be a key theme at the world's second biggest PC fair this year, and there is likely to be keen interest in super-thin, lightweight laptops designed to cut power consumption and save battery life. Acer, Asustek and Microstar are betting on new-generation laptops, powered by Intel's new consumer ultra-low voltage (CULV) processors. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! Facebook LinkedIn Next Article: Nintendo to launch new version of Wii Fit: report Also on Reuters GM bondholders glimpse carrot behind the stick Hotel cost cuts spur investor interest Blog: Best reads of May More Technology News Nintendo to launch new version of Wii Fit: report E3 seen returning to glitz Rhapsody's exclusive ads target music consumers Obama to create White House cybersecurity post Time Warner leaning to spin-off method for AOL More Technology News... 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