THT Research - Weekly Newsletter from Taiwan

The Latest News on Global IT Contract Manufacturing from www.THTresearch.com 

COMPANY NEWS AND INDUSTRY TRENDS

Samsung pleads guilty to DRAM price fixing
Samsung Electronics (S.Korea) and Samsung Semiconductor (US) have agreed to plead guilty and pay a US$300M fine for conspiring with other companies to fix prices on DRAM sold to US computer and server manufacturers (Dell, Compaq, HP, Apple, IBM, and Gateway). Also named in the conspiracy were Hynix (S. Korea) and Infineion (Germany), both of which previously plead guilty.

New Philips DVD certifications
Ritek has received Philips' certification for its 8X DVD+R DL discs. Similarly, Optodisc received Philips certification recently for its 16x DVD+R discs (as well as for 2.4x DVD+RW and from Pioneer 8x DVD-R and 4x DVD-RW).

Wus compensates Motorola
Wus Printed Circuit has paid a fine of US$2M to Motorola over accusations of quality issues for handset-use PCBs (although Wus claims that the issues was a misunderstanding about product specifications).

TriGem exiting desktop business
TriGem Computer (S.Korea), sold under the Averatec brand in the US, is exiting the desktop PC business to focus on NBs. product line to focus on notebooks, according to industry sources.

Hon Hai sold US$2B in September!
Hon Hai Precision Industry Co recorded sales of US$2.05B in September, making it the #1 electronics manufacturer in the world. Look for more Hon Hai acquisitions in the future....

CPT to postone expansion
CPT is postponing its planned US$6.61B plant expansion by at least 6 months because of uncertainty as to which size/dimension LCD TVs will become the mainstream. CPT is deciding between 7.5G and 8G for its plant. It's tough to be an LCD panel maker these days. Financially, these companies have to take huge risks.

BenQ to continue to wok with Infineon
BenQ Corp plans to keep Infineon Tech-nologies AG as a long-term supplier for Siemens' handset business.

Corning to expand LCD glass plant in Taiwan
Corning Inc is the world's largest maker of LCD glass plans to invest US425M in 2006-7 to expand its plant in Taichung, Taiwan.

BRING ON THE ORDERS

Samsung SDI blue LED orders
Harvatek has won orders from Samsung SDI for blue LEDs for handset-use keypad backlights, with volume shipments to begin soon. Harvatek previously had filled Samsung's order, only to loose it to Everatek in 1H04.

LG HDD for PDP TV-DVD recorder orders
Seagate has won orders from LG for HDD for its PY2DR PDP TV with built-in 160GB DVD recorder.

ViewSonics 19W-inch monitors
Chi Mei Corp. has recently won orders from ViewSonics for 19-inch wide-screen LCD monitors, after having won a similar order from Acer. Expect to see similar sized products out from LG and Samsung by year-end as demand for large-sized, wide screen monitors grows.

Intel microprocessors to be used in BlackBerrys
Research in Motion Ltd has announced that it will Intel's PXA9xx cellular microprocessors in future BlackBerrys to boost performance, especially in internet and multimedia applications.

M & A

Intel to buy Zarlink's TV tuner business
Intel plans to buy Zarlink Semiconductor's (Canada) UK-based radio frequency consumer business, which makes tuner and demodulation technologies for televisions that convert, cable, and satellite TV signals into digital. The deal is worth US$68M.

TI looking for buyer for sensors and controls business
Texas Instruments has hired Morgan Stanley to sell its sensors and controls business, which accounts for close to 10% or TI's revenue.

Kinsus acquiring Qualibond COF facility
Kinsus Interconnect Technology is acquiring COF substrate maker Qualibond Technology’s equipment and Taoyuan, Taiwan plant for NT$195M, which will give it a monthly COF capacity of 5-6M. Since Qualibond’s COF substrates have been validated by Himax Technologies, Novatek Microelectronics, and several Japanese and Korean LCD related makers, the acquisition will give Kinsus a shortcut entry to the market.

Ericsson may take over Marconi
Reports indicate that LM Ericsson (Sweden) may take control of Marconi Corp. (UK), beating Huawei Technologies' bid (China).

Tatung - ECS deal
A deal between Tatung Co. and ECS, to be completed by Jan 1 2006, specifies that ECS will acquire Tatung's desktop unit and in exchange Tatung will acquire 30% of ECS. The deal will make Tatung the largest shareholder in the motherboard maker.

GE to invest in Shenzhen Development Bank
GE Consumer Finance plans to buy a 7% stake in Shenzhen Development Bank for US$100M in order to enter China's growing personal loan market. The deal is still pending final government approval and only then will the official announcement be released. Newbridge Capital (US) has an 18% stake in the bank.

Delay on Prodisc - Optodisc merger
Prodisc Technology and Optodisc Technology plan to merge, but the merger was put on hold until Optodisc can resolve questions raised by the Taiwan Stock Exchange Corporation about its 1Q05 financial report.

DSC

Taiwan's DSC industry is back (first tier, at least)
In 2006, Taiwan's top 4 DSC makers - Premier, Altek, Asia Optical, and Ability, are expected to account for over 40% of the global market. Price pressure on international DSC brands is causing most of them, including Japanese makers, to release contract orders in order to cut costs, and Taiwan makers are benefitting. However, second tier Taiwan DSC makers such as Aiptek, Tekom, and Skanhex are suffering losses and the industry should see consolidation in the near future.

CHINA

More mobile phone manufacturing licenses granted
China's National Development and Reform Commission has granted mobile phone manufacturing licenses to seven more companies: Malata, Changhong, Guangzhou Jinpeng, Langchao Lejin Digital Mobile Communications (a joint venture between Langchao and LG), Amoi, MiTAC International (Taiwan), and Guangdong Bu Bu Gao.

More funding for Dalian, including Microsoft
China's largest software exporter, Dalian Hi-Think Computer Technology Co Ltd, has received US$15.5M in funding from several companies, one of which was Microsoft.