Taiwan's electronics industry chain is set to brace for a strong rebound as strong demand in the notebook, tablet PC and LCD TV sectors and the need to prepare for inventory build-up ahead of the May 1 holiday in China have forced related makers to speed up their production, according to industry sources.

With Intel already beginning to ship fixed chipsets for its Sandy Bridge platform, notebook shipments from ODMs are likely to grow 30% sequentially in March compared to a low base in February, the sources indicated.

February shipments of notebooks from Compal Electronics and Wistron were down 13% and 23% to below three and 1.9 million units, respectively, affected by reduced shipments to Acer and Lenovo. Quanta Computer was likely to see its shipments drop 10-12% sequentially in February due to reduced orders from Hewlett-Packard (HP), said the sources. Overall, notebook shipments from six major ODMs were expected to suffer a decline of over 15% in February.

In the tablet PC segment, shipments of Apple's iPad 2 alone are expected to top three million units in March as other brand-name vendors, including HTC, Motorola, HP, RIM, Acer and Asustek begin to release or ramp up shipments of their own-brand tablets. The step-up in shipments of iPad-like tablets have encouraged component suppliers including those of touch-panel controller ICs, touch panels and batteries as well as assembly plants to ramp up output, indicated the sources.

Shipments of Motorola's Xoom tablets reached 300,000 units in February and are expected to top 400,000 units in March, according to sources at Taiwan-based touch panel makers.

Meanwhile, TV vendors have stepped up purchases of flat panels as their inventories have been reduced substantially due to strong sales during the Lunar New Year holidays, while the early May Labor Day holiday season is approaching, pointed out the sources.

A sharp reduction in production costs and efforts by Samsung Electronics, LG Electronics and Sony to promote smart TVs will help push the penetration rate of LED backlight TVs from 21% in 2010 to 36% in the first quarter 2011, 50% in the second before reaching 64% in the fourth, said the sources.