Taiwan High Tech.Com
Aug 31, 2004
Contract Manufacturing and Beyond ....
Contract manufacturers, and their customers, are BIG in India. We've been looking into India's call centers lately and are impressed with the scope of outsourcing to them and their abilities. India's IC design firms also perform valuable work for many of us, shortening time-to-market. The third area we've been looking into is the Indian market for mobile phones, one of the fastest growing in the world. So expect to see new research on India from THT in the coming months - it's a central part of the OEM world and we want to understand it. Of course China is still fascinating. A recent THT survey about Chinese consumer behavior revealed some surprising facts, such as that the Chinese will not buy on installment payments, whatever the terms are.. They view installment terms as simply a way to trick them. They also love "all-in-one" products (hello Xerox).
BRING ON THE ORDERS:
Medion has ordered 95K NB from Wistron, with shipments to begin next month.
Foreign IPOs (international procurement offices) will spend US$50B from Taiwan this year, with the top 10 IPOs: HP, Dell, Apple, Gateway, IBM, and Intel. The top 5 Japanese IPOs are Sony, Fujitsu, Hitachi, NEC, and Toshiba, which bought a combined US$9.3B worth of IT products from Taiwan in 2003.
Lenovo has bought MB for its entry-level PCs from ECS and MSI. ECS is Lenovo's largest contract maker for MB, shipping it 3M per year out of a total of 4M to China.
Compal is OK
Compal's shipments to Toshiba and HP were delayed in 2Q, leading to a 10% drop in sales, but 3Q sales bounced back up, with 2M NB shipment. Compal is forecasting 2.3M 4Q shipments boosted by Dell orders, US holiday demand and seasonal demand.
Fujitsu DSC order
Asia Optical has received new 4MP and 5MP orders from Fujitsu (total 1.4M units). This is Fujitsu's first time sourcing a large order from Taiwan. Asia Optical will mostly do assembly for the project as its DSC experience is mostly OEM (Fujitsu's EMS plant will do the design).
Yageo Corp has received orders for its MLCC's from Matsushita (Japan).
Bought from Taiwan
US$50B in IT products for 2004 According to Taiwan government officials, foreign IPO purchases of IT products from Taiwan could top US$50B this year. In 2003, IPOs bought US$48..5B worth of IT products, or 91.7% of Taiwan's IT production. As YD says, "it's an OEM country!" Want to know which IPOs spend the most?Get THT's Guide!
HP, Kodak DSC orders -- not to Taiwan
Kodak will use Funai to make its high-end DSCs, while HP will give its order to Sanyo. Uh-oh for Taiwan - Taiwan DSC makers are losing their edge to Japan DSC makers, especially Sanyo.. Taiwan firms that are still competitive are Premier, Ability, and Chicony.
Quanta has received ODM orders for cameraphones from Philips, to be shipped beginning 4Q04.
Motorola cell phone screens
AUO received orders for 1.8, 1.9, and 2.2 inch color TFT-LCD panels for handsets. Shipments have begun, with 3Q04 volume delivery of up to 1M/month.
OEM @ CHINA
IBM up, Lenovo down
Well, we all say the Chinese are 'nationalist' consumers, but I guess not that much. IBM is now the largest NB vendor in the mainland, having surpassed Lenovo in 2Q04. IBM has a 17.1% market share, compared to Lenovo's 16.4% share.
Microstar, ECS boards in Lenovo machines
Lenovo has decided to source boards for its budget PCs from ECS and Microstar of Taiwan. The boards use an AMD processor.
PowerChip Semiconductor Corp.
PSC may ally with Japanese partners to enter the China chip market and is planning to open eight-inch wafer fabs in China by the end of the year. It is also expecting its three 12-inch wafer fabs to enter volume production in 2006.
COMPANY NEWS AND MARKET TRENDS
The Patent Ranking
THT thought you'd be interested to read the ranking of US patents filed by country in 2003. #1 Japan (2.98/10K people); #2 Taiwan (2.96/10K people); #3 Israel (2.04/10K people); #4 Switzerland (2.02); #5 Sweden (1.92); #6 Germany (1.5); #7 France 90.7); #8 UK (0.68); #9 Spain (0.08).
Taiwan on-line shopping
According to ACNielsen, 2.1M people in Taiwan have purchased products on-line. 70% of them are aged 20-39. Most popular sales are beauty care, clothing, fashion, airline flights. Now, if someone would offer instant stock market buys on-line, that might capture the Taiwanese' attention!
Taiwan DSC industry hitting hard times
Canon is boosting in-house DSC production, starting with DSC-use PCB, of which it currently outsources 40%.. Panasonic is also expanding in-house DSC assembly. Taiwan's DSC assemblers will be feeling the crunch of these developments, combined with competition from Sanyo and Funai, and built-up market inventory.
Compal has tradition of having stupidly named subsidiaries (remember Tompal?), but its subsidiary Cal-Comp (hmm... wonder where they got the idea for that name) is a great company. Cal-Comp's 1H04 sales were up 46.4% YoY coming in at NT$19.7B.
Acer restructuring - again....
Acer has announced that it will restructure its PC distribution network in China, cutting sales agents and working with regional agents. Well - Acer is ALWAYS restructuring because the company is MUCH MUCH better at PR than at marketing and sales. They should go back to the OLD days when they actually manufactured, which they were good at, and get rid of Wistron too while they're at it... YD is considering boycotting Acer press releases from now on they're so thick...
Suntek will terminate operations beginning this week until yearend 2004, with no details offered about when it might resume its foundry operations.
Lite-On #1 in Taiwan for LCD monitors
In July, Lite-On shipped 600K LCD monitors, surpassing BenQ as Taiwan's #1 supplier in the line. Lite-On expects to ship 7M in 2004, competing with BenQ and TPV for the #1 spot.
Dell, Apple targeting Taiwan market Dell and Apple have announced new strategies to develop business in Taiwan. Dell will set up a Kiosk center in downtown Taipei to push direct PC sales through demonstrations, trials, and direct-ordering. Apple plans to set up a franchise store and two other shops in Taipei, and to partner with the ubiquitous 7-11, to promote its i-PODs
Opto Tech Corp.
Opto Tech has signed a deal with Nichia Chemical (Japan) to use Nichia's patents to make chips for LEDs using diode epitaxy wafers licensed from Nichia. Opto Tech will be the only supplier in Taiwan that Nichia will license its patent to. Opto Tech will be able to sell the chips in Taiwan, China, and South Korea.
SOLD!! TO TAIWAN..
Systex has entered into an alliance with Microsoft Taiwan to tap the market for iSCSI (Internet small computer system interface), an internet protocol-based storage networking standard for linking data storage facilities. According to Gartner, the iSCSI market will grow from 210K servers currently to 1.64M in 2007.
R&D IN TAIWAN:
R&D in TW
Conexant plans to expand its telecom chip design center in Taiwan. Taiwan companies are Conexant major customers and the center will offer those customers hardware/software support including test services and circuit-board design verification to help them develop wireless products based on its chips.
R&D Fever - Japan
Japanese firms are getting in on the action, with 60% of Japan firms working in Taiwan planning to expand R&D on the island, acording to a IDIC/MOEA survey. Many Japan firms take Taiwan as a test market for products aimed at mainland China and as a stepping stone for China manufacturing of their own.
The Taipei Computer Association (TCA) is preparing a united front for Taiwan companies participating in eMEX Suzhou, the largest exhibition in Asia, on October 20-23. TCA is instructing Taiwan companies on travel arrangements and other exhibition issues. Funny to see so much coordination among Taiwanese companies, when the usual definition of cooperation consists of stealing each other's engineers away... What is this, China here?