Merry and Silitech first-half shipments may be affected by Sony Ericsson revised 1Q guidance

Major component suppliers for Sony Ericsson in Taiwan, including Merry Electronics (headsets) and Silitech Technology (keypads and cases), are expected to see their shipments in the first half of this year affected significantly after the vendor revised downward its sales and earnings outlook for the first quarter, according to sources at the companies and in the Taiwan handset industry.

Sony Ericsson said last week in a press release that moderating sales growth of mobile phone units is expected to negatively impact net sales and net income before tax ("NIBT") for the first quarter of 2008. Slowing market growth of mid-to-high-end phones in markets where Sony Ericsson has a strong presence is affecting sales.

While declining to commend on Sony Ericsson's announcement, Merry contended that its first-quarter performance will be lower than expected, with first-quarter revenues to slide 8-12% sequentially from the fourth quarter of 2007. Earlier the company had projected only a 5% on-quarter decline.

Despite the sequential decline in the first quarter, Merry still projects a more than 50% on-year growth in revenues for 2008.

Silitech also declined to comment the operations of its client, stating that it doesn't rely on orders from a single customer and that its operations for 2008 are unlikely to be affected by a single client.

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