Taiwanese tech companies as Asustek Computer Inc (華碩) and Acer Inc (宏碁) said their product sales in India have been affected by New Delhi’s unexpected demonetization policy last month, as it has weakened business activities and consumer confidence.
“Overall business activity is declining, with the effect on Asustek’s smartphone business appearing to be more obvious than on the company’s notebooks,” Asustek spokesman Nick Wu (吳長榮) told the Taipei Times by telephone.
India is one of Asustek’s fast-growing smartphone markets. The company has sold 3 million ZenFones in the nation and has a 2.5 percent share of the smartphone market, the company says.
Asustek’s PC sales, including notebooks, were the fifth-highest in the Indian market in the second quarter with a 3.3 percent share. However, it was overtaken by Apple Inc in the third quarter, International Data Corp (IDC) figures showed.
The Indian government’s decision to prohibit the use of 500 and 1,000 rupee (US$7.40 and US$14.80 at current exchange rates) banknotes from Nov. 9 had a domino effect on the country’s consumer electronics industry, as the majority of transactions are carried out in cash, so consumer purchasing power was severely restricted, industry sources said.
Asustek has decided to enact controls on marketing and promotional expenses in response to the changing market dynamics in India, Wu said.
Despite the drastic change to the market, “the freeze in market demand still looks manageable to Asustek,” as the country accounted for only 3 percent of the company’s total sales, Wu said.
Asustek sees the issue as a short-term problem and believes in India’s long-term economic growth momentum, Wu said.
Acer faced a similar situation.
It said the sales performance of its electronics products was affected by the government’s decision.
“Sales following promotional events were weaker than expected,” an Acer official said by telephone, adding that the firm’s notebook sales were hit harder than those of its smartphones due to their higher sales exposure.
The official said Acer is re-evaluating its promotion activities and considering calling off some upcoming events.
Acer is the fourth-largest PC vendor in the Indian market with a 9.9 percent share, IDC statistics show.
Revenues from the pan-Asia-Pacific region, which includes the Indian market, contributed 33 percent of Acer’s total IT hardware sales of NT$55.23 billion (US$1.74 billion) in the third quarter, according to company data.
Foxconn Technology Group (富士康), the world’s largest contract manufacturer, reportedly requested that about 25 percent of its 8,000 factory workers in India take two weeks of paid leave, as falling sales in smartphones in local market forced it to cut production.
The Economic Times on Monday said that Foxconn might extend the paid leave to next month if consumer demand remains gloomy, citing anonymous sources.
Foxconn did not respond to the Taipei Times’ request for confirmation of the report.
HANDOVER POLICY: Approving the probe means that the new US administration of Donald Trump is likely to have the option to impose trade restrictions on China US President Joe Biden’s administration is set to initiate a trade investigation into Chinese semiconductors in the coming days as part of a push to reduce reliance on a technology that US officials believe poses national security risks. The probe could result in tariffs or other measures to restrict imports on older-model semiconductors and the products containing them, including medical devices, vehicles, smartphones and weaponry, people familiar with the matter said. The investigation examining so-called foundational chips could take months to conclude, meaning that any reaction to the findings would be left to the discretion of US president-elect Donald Trump’s incoming team. Biden
INVESTMENT: Jun Seki, chief strategy officer for Hon Hai’s EV arm, and his team are currently in talks in France with Renault, Nissan’s 36 percent shareholder Hon Hai Precision Industry Co (鴻海精密), the iPhone maker known as Foxconn Technology Group (富士康科技集團) internationally, is in talks with Nissan Motor Co’s biggest shareholder Renault SA about its willingness to sell its shares in the Japanese automaker, the Central News Agency (CNA) said, citing people it did not identify. Nissan and fellow Japanese automaker, Honda Motor Co, are exploring a merger that would create a rival to Toyota Motor Corp in Japan and better position the combined company to face competitive challenges around the world, people familiar with the matter said on Wednesday. However, one potential spanner in the works is
HON HAI LURKS: The ‘Nikkei’ reported that Foxconn’s interest in Nissan accelerated the Honda-merger effort out of fears it might be taken over by the Taiwanese firm Nissan Motor Co has become the latest buyout target in Japan as it explores a merger with Honda Motor Co and faces an overture from Hon Hai Precision Industry Co (鴻海精密), known as Foxconn Technology Group (富士康科技集團) internationally. Shares in Nissan yesterday jumped 24 percent, the most on record, to hit the daily limit, after the two Japanese automakers acknowledged that talks are ongoing to better position themselves for competitive challenges during a time of upheaval in the global auto industry. Foxconn — a Taipei-based manufacturer of iPhones, which has been investing heavily in factories to build electric vehicles — has also
CHIP SUBSIDY: The US funding would help alleviate the financial pressure from building two fabs in the US and should lift gross margins in 2026, the company said GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said it is to receive US$406 million in subsidies from the US Department of Commerce for two new US fabs under the CHIPS and Science Act, with the first batch of the funds likely coming next year. The grant represents 10 percent of the planned investments of US$4 billion in advanced semiconductor wafer manufacturing facilities in Texas and Missouri, GlobalWafers said. The commerce department is to disburse the funds based on the completion of project milestones over a multiyear timeframe, the company said. Along with the tax credit, which is equal to
RSS