HONG KONG – The peak season for airfreight is off to a slow start, says Trans Global Logistics. 
 
Soft demand for space has been caused by a number of market conditions, including earlier shipping patterns influenced by China's decision to reduce export incentives; early shipping to avoid the perceived threat of a USWC labor disruption; proactive shipping to avoid west coast port congestion, and cautious holiday shopping projections by retailers that expect sub-prime mortgages to be reset at higher interest rates – and higher fuel costs, the company says.
 
Throughout the Asia-Pacific region, there has been adequate lift to meet demand, and transit times have been consistent with non-peak periods, says president Robert W. Mooney. On the other hand, fuel surcharges remain persistently high and could be poised for another period of upward adjustment, he continues. Some countries, including Korea and Thailand, have seen export volumes tail off in part because of the rising value of their local currencies.
 
Looking ahead, most carriers in the region are anticipating demand for space to build later this month and carry forward through October, says Mooney.
 
Specifically, in China, demand from the Shanghai area has been relatively strong since late August, and carriers have been able to impose rate increases, while transit times have degraded somewhat, says Trans Global.
 
In North Asia, demand for space is down from last year; however, air carriers in Taiwan and Hong Kong have begun imposing rate increases. ICN is reporting a backlog of trans-shipment cargo in the vicinity of 400 to 500 tons, and freight originating from Korea is being uplifted without delay, the company adds.
 
In the Indian subcontinent, there is sufficient space to meet demand; rates are stable, and transit times are consistent, except via Europe. Importers should keep an eye on the political situation in Pakistan and be mindful of the start of Ramadan, which will impact operations in Muslim countries, says Mooney.
 

MADISON, WI – Thermo Fisher Scientific will distribute Edax’s electron backscatter diffraction systems, the companies announced. No other terms were disclosed.

SAN FRANCISCO – PC growth could surprise during the next several quarters – even assuming a modest slowdown in U.S. consumer demand, a leading analyst said today.

Chris Whitmore of Deutsche Bank Equity Research issued a 15% year-over-year unit estimate for 2007 and 13% for 2008.

Emerging markets (40% of global units) are becoming increasingly important to global PC demand and remain healthy because of growing penetration, he wrote in a research note.

Whitmore said the corporate PC cycle will accelerate into 2008 because of upgrades to Vista-ready hardware (50% of global units). As such, Dell provides significant upside opportunity resulting from improving corporate PC demand, its restructuring efforts and significant buybacks. Meanwhile, slowing U.S. consumer demand could disproportionately impact H-P (17% of total PC units). However, U.S. consumers purchase only 10% of the total PC volume, making it a less meaningful driver, he adds.

During the past several weeks, major semiconductor and disk drive vendors have pointed to broad-based strength in the PC market. Intel guided higher because of PC strength. Western Digital and Seagate also reported healthy PC unit demand. As a result of these and other supply chain checks, Whitmore believes the third quarter build was above normal seasonality, perhaps tracking as high as 20% sequentially, the company says.
 
While some of this undoubtedly resulted in some inventory growth, Whitmore says the combination of continued strength in international markets, no material slowdown in the U.S. consumer market as of yet, and the beginning stages of a corporate upgrade cycle are driving PC demand. As a result, the firm expects third quarter units to trend at least in line with normal seasonal growth.

Since 2003, PC units grew about 12% sequentially on average in the third quarter. DB’s current PC model calls for 12% sequential unit growth in the third quarter (or 15% year-over-year), which is in line with normal seasonality.

In the fourth quarter, the company expects the mix of growth to begin shifting, with stronger corporate and international demand to offset slower U.S. consumer demand. Any pickup in corporate PC demand should disproportionately favor Dell, while a softer consumer should disproportionately impact H-P, particularly low-end, Whitmore says.

While subprime/credit concerns raise valid questions regarding the health of U.S. consumer demand, the U.S. comprises only 27% of global PC units. Of the U.S. market, the consumer portion represents about 36% of units, or about 10% of global PC unit demand.
 
Consumer PC demand has been quite volatile in the past; particularly in 2005 – a year when the PC industry enjoyed 16% unit growth, Whitmore says. Meanwhile, the U.S. corporate market tends to be less volatile. After slowing considerably through 2006, it appears U.S. corporate growth is reaccelerating and may eclipse 10% unit growth in the second half of the year or in 2008.

EL SEGUNDO, CA – After declining or remaining stable for the past six months, the average selling price for LCD-TVs rose significantly in July and remained at a higher level in August. But while the price increases have been a boon for LCD-TV makers, they are not expected to last, according to iSuppli Corp.
 

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