China electronics exports decline in June, except for PCs

A bad month had to come sooner or later, reports iSuppli

Rick Nelson, Chief Editor -- EDN, September 8, 2010

China's mobile handset and LCD-TV exports declined unexpectedly in June, as the handsets were negatively impacted by a government investigation and the televisions took a hit due to weak demand and rising inventory, according to iSuppli Corp.

Exports of mobile handsets in June amounted to 59.5 million units, down 1% from 60 million in May. Meanwhile, total LCD-TV export shipments fell by 3% percent, declining to 4.3 million units, down from 4.4 million the previous month, the market research company reports. Channel inventory in June rose compared to May because of weaker-than-expected sales.

"Driven by strong global LCD-TV market demand, China's LCD-TV export market soared during the first half of 2010," said Kevin Wang, director of China research at iSuppli. "By the end of June, total export shipments had grown by 50% compared to the first half of 2009."

He added, "However, LCD-TV inventories in the channel piled up after China's Labor Day on May 1, iSuppli's China industry analysis indicates. Furthermore, LCD-TV OEMs placed fewer orders to ODMs (original design manufacturers) in July because of less-than-optimistic news regarding demand in the United States and Europe."

Meanwhile, China's cell-phone exports were impacted by the government's investigation into the gray handset market in June. Total shipments of gray market China handsets in June fell 25% percent from May. End-market demand also slowed in the emerging markets as ASPs (average selling prices) fell during the first half of the year. Other products suffering declining exports in June included digital still cameras and air conditioners.

Products continuing to show export growth in June included notebook and desktop PCs, car navigation systems, and satellite set-top boxes, iSuppli reports. Notebooks were the standout segment in June, with shipments rising 19% to reach 16.8 million units, up from 14.2 million in May, despite weak end-market sales of OEMs to notebook original design manufacturers.

However, given the strong 2010 so far for China exporters in this segment, a bad month had to come sooner or later. And such weak end-market demand is bound to catch up to the country's notebook exporters, as iSuppli anticipates July shipments to be either flat or show a slight decline.

The big winners in the China notebook export market continue to be Quanta and Compal, both of which increased shipments in June. Quanta saw its shipments in June rise to 5.1 million units, up from 4.6 million units in May. Compal expanded its notebook shipments to 3.5 million units in June, up from 2.6 million units in May. The iSuppli's report titled China Export Market Down in June, Except for PC Industry provides more details.