Asustek is expected to record a 10-20 per cent decline in profits for 2008.

The company is projected to generate profits of NT$22-24.7 billion ($657-737.5 million) for the year, down sharply from NT$27.5 billion in 2007. Analysts have attributed the rather sizeable decrease to an excess in inventory and a series of missed projections.

Asustek has also revised its overly-optimistic notebook shipment estimates, but continues to insist that its netbook distribution goal will remain on track at five million units. Indeed, the firm reportedly shipped an impressive 4.2 million notebooks during the first three quarters of 2008. Buoyed by successful sales, CEO Jerry Shen famously predicted that Asus would sell 1.9 million units during the fourth quarter. Nevertheless, the corporation only managed to ship 620,000 notebooks in October, 550,000 in November and 300,000 in December - a total of 1.47 million units.

Asustek also recorded a 20 per cent drop in motherboard shipments during the month of November, but expects to ship a total of 22 million units in 2008, which would represent an actual increase of three per cent. It should be noted that Asustek chairman Jonney Shih recently insisted that the company's motherboard business was perfectly stable. Although reports indicated that Asustek was poised to cut its shipment forecast for 2008, Shih claimed that the company remained intent on becoming a global top-three notebook vendor by 2009-2010.

Meanwhile, Asustek subsidary Pegatron Technology has been forced to lay off 50 per cent of its workforce. The firm plans to slash jobs at its Suzhou and Shanghai plants by the end of 200, leaving a total of 45,000 employees.  X

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