Samsung reportedly to procure cellphone PCBs from Taiwan

Samsung of South Korea, a major global cellphone brand, is expected to soon release cellphone printed circuit board (PCB) orders to Taiwanese suppliers, and the Korean brand's cellphone-board outsourcing rate is expected to reach about 20% in the future, according to industry sources.

Samsung is expected to place cellphone PCB orders with local companies such as World Wiser Electronics Inc., Compeq Manufacturing Co., Ltd., and Unitech Printed Circuit Board Corp., the sources said.

Samsung changed its policy in late second quarter to start outsourcing cellphone boards. In the past few months, the Korean firm has sent officials to contact some Taiwanese PCB makers and visit their production facilities in mainland China.

Among the candidate suppliers, Unitech reportedly has begun monthly small-batch shipments, while World Wiser and Compeq are expected to be certified in November, by Samsung, which is expected to place orders in December.

All the said Taiwan companies refused to confirm the report.

After it replaced Motorola as the world's No. 2 cellphone brand in the second quarter this year, industry sources said, Samsung is actively trying to further expand its market share and increase shipments in some third-world nations such as mainland China, India etc. but the firm's in-house capacity would not be sufficient to support the rapid expansion. In addition, they added, Samsung never outsourced its cellphone PCBs before, compared with Motorola and Sony Ericsson that outsource at least 40% to 50% of such key parts, so the urgent thing is to cut costs for higher competitiveness.

After Samsung places orders with Taiwan cellphone-PCB suppliers, Taiwan will become a major outsourcing citadel of the world's top-four cellphone brands. Nokia, currently the world's No. 1 cellphone brand with a global market share of 37%, outsources about 40% of its needed cellphone PCBs from Taiwan suppliers. Motorola is the most active procurer of its kind from Taiwan suppliers by outsourcing over 60% of the cellphone boards, though the brand's shipmentsthis year have been not so smooth. Sony Ericsson, with an about 10% global share, currently procures about 30% of the PCBs from Taiwanese companies and the rate is expected to continue increasing.

Samsung currently owns a global market share of 13% to 14%, which is expected to increase to outstrip 15% in the future. Industry sources said that if Samsung procures about 20% of the cellphone PCBs for its annual shipment volume of 140 million to 180 million units from Taiwan, the ordered volume is already enough for keeping a cellphone PCB plant. 

 

Major Cellphone PCB Manufacturers in Taiwan
Company	Maximum Monthly Capacity*	Current Operation	Major Customers
World Wiser	Over 20 million	Full-capacity production in early Sept.	Nokia, Motorola, Sony Ericsson etc.
Compeq	20 million	Full-capacity production in late Sept.	Nokia, Motorola, Compal Communications
Unitech	15 million (by year-end)	Full-capacity production in early Sept.	Sony Ericsson, Motorola, HTC, Samsung etc.
*: Including plants in Taiwan and mainland China. Source: The companies.

source & copyright: CENS