Computex 2001, held last week, coincided with a 10-year low on the Taiwan stock exchange, and concerns about where the growth engine will come from.

Taiwan ranks as the No. 4 nation for information technology hardware, according to the Taiwan government's market intelligence center. But growth in 2000 was just 10 percent, to $23 billion, and the People's Republic of China shot past Taiwan with a 38 percent growth rate in hardware production, to $25.5 billion. (The United States, with $88 billion, and Japan with $45 billion in IT hardware, had growth rates of 4 percent and 3 percent, respectively.)

The problem, of course, is that Taiwan's production of desktop PCs grew only 8 percent last year, and will slow to 7 percent this year. Notebook growth, by contrast, was 24 percent last year and will hit 21 percent this year.

There are other bright spots. A January report by the Market Intelligence Center predicts that DSL modem production will grow by 136 percent this year, to roughly $327 million, while cable modem production will grow only 6 percent, to $648 million. Companies such as Zyxel, Ambit and GVC are moving assembly of DSL modems partly to the mainland, and Taiwan's share of DSL modem production is moving to a dominant position.

The hope is that notebooks will carry the heavy water in lifting Taiwan's economy again. The subnotebooks at Computex were just what the doctor ordered, with the small form factor that would allow a person to carry the notebook around wherever his master went, and the wireless modem connectivity that would make carrying it around worthwhile.

And full-featured notebooks are headed to sub-$1,000 price points, so that students and others can weigh notebooks against desktops in the back-to-school buying season.

But the personal computer is not headed back to hypergrowth any time soon. In consumer electronics, there are digital televisions and cameras and surround sound and other products that make a person want to spend. In wireless mobile, paying for a combination phone-PDA seems equally plausible.

But forking over a couple of grand or more for a personal computer-as we have all done many times over the past 20 years-doesn't seem so inviting. And that was Taiwan's challenge at Computex.