Battery shortage should evaporate by Q3

by Dan Nystedt

May 5, 2008 —

A shortage of lithium-ion batteries currently hurting laptop computer shipments
will likely ease in the third quarter, an executive said Friday.

A fire at South Korea's LG
Chem in March has crimped global supplies of lithium-ion batteries. The
timing couldn't be worse. Demand for notebook computers is soaring this year
as people turn to mobile computing and eschew desktops. Some companies, such
as Asustek Computer, have
already said the shortage will crimp their laptop PC shipments this year.

"I think maybe the battery shortage may hurt every brand," said J.T.
Wang, chairman of Acer,
at the company's investor conference two weeks ago.

But the head of the world's largest independent notebook battery maker, Simplo
Technology, said he expects the lithium-ion supply to return to normal in
the third quarter and allow battery makers to substantially increase production.

"The LG Chem problem has had a big impact on supplies, but we're working
with customers and they understand," said Sung Fu-hsang, chairman of Simplo,
at the company's first quarter investors' conference on Friday.

LG Chem could not be reached for comment.

The timing for a rebound in battery shipments couldn't be better for the industry.
The third quarter is when sales of laptop PCs pick up as kids go back to school,
and is followed by the peak-holiday sales season.

For now though, the problems mean a struggle for some companies.

Asustek believes the battery shortage means lost sales of its popular Eee
PC low cost laptop this year. The company will reach its 5 million unit
shipment target, but it could have increased the target were it not for the
battery troubles, said Jerry Shen, CEO of Asustek, at a news conference a few
weeks ago.

Quanta
Computer, the world's largest contract laptop PC manufacturer, predicts
that smaller PC makers will be hurt worse by the battery supply problem because
big companies are normally served first since they offer the most lucrative
contracts.

IDG News Service