Letter To Shareholders - Mitac

therefore, the server market has seen some growth, and international servers are also on
the rise. Global server shipments have grown by 10% since 2003.
In response to the increase in shipment but the decrease in prices, major
international vendors have been outsourcing in order to gain more advantages.
Taiwanese companies have competitive edges in low cost, quick R&D and flexibility
of delivery time. Therefore, the scale of the server industry has grown because of the
increase of orders. Even though most are entry-level and low-end products, the
increase in volume and more expensive rack-optimized and blade servers are
compensating for falling prices for some components, so that the overall shipment
value continues to show growth.
Given the worldwide economic recovery and the growing demand for cloud
computing, we can expect significant growth from Taiwan's server and storage device
industries in 2010.
(3) Mobile communications products
Despite the economic recession, all suppliers continue to design an innovative and
creative product. When all the convenience, precision, acceptable prices, common
applications in recreation and car use start to work, the combination of GPS will
create a maximum market.
According to the investigation report of Goldman Sachs, in all global navigation
devices in 2008, PND weighs 70 % and GPS and PDA take 10% of each in the market,
and the rest 10% is installed in automobiles. In the report, they predict that GPS will
grow to 20 % and PND will lower to 61 % in 2010.
MiTAC has been developing our own brand and committed to the windows CE of
platform; hence, we believe the strategies of continuous product development,
technical advantage and strategic alliance with worldly famous vendors will benefit us
on getting new orders and exploring new market.
(4) Enterprise and channel / workstation products
In recent years, corporate users have become increasingly aware of ROI and C/P
ratios; the availability of low-cost yet high-performance products has become the
primary concern when it comes to IT procurement. The company's TYAN brand offers
multiple server products from entry-level to high-end setups, adopting the latest
production of 6-core and 12-core designs and supports to DDRIII; some of which can
even support GPU. Hence the company is able to provide suitable products for any
hardware platforms, regardless of whether they are ordinary server rooms, large-scale
computing center, database center, cloud computing center, public infrastructures or
government projects etc. These users are also the main business targets of the
company's X86 server market.
4. Favorable and unfavorable factors affecting MiTAC’s competitive edges and their
fallback plans
To overcome the challenges presented by the global economic recession, MiTAC
will take advantage of the new Joint Development Manufacturing (JDM) approach,
combining global R&D, engineering, manufacturing, designing, electronic
manufacturing, sales distribution, and technical/after-sales services to achieve a higher
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