| Prime News | | ![]() | ![]() | MOI Issues Yellow-Blue Light for Q2 Housing Market
Taipei, Sept. 28, 2007 (CENS)--After having issued a green light representing steady market climate for six quarters in a row, the Architecture and Building Research Institute under the Ministry of the Interior (MOI) flashed a yellow-blue light for the domestic construction market in the second quarter yesterday (Sept. 27), indicating possibility for a market slowdown.
The message coincided with statistics showing rather high inventory of unsold new houses, amounting to 32,000 units or NT$262.5 billion in value island-wide, as of the third quarter this year, released by My Housing magazine yesterday.
Ho Min-chin, director of the MOI's construction industry institute, reported that a market survey sponsored by the institute shows that majority of the surveyed subjects harbored a more conservative market outlook in the second quarter, compared with the first quarter, and an even gloomier outlook for the third and fourth quarter. Financial institutions were especially pessimistic.
Chang Chin-o, professor of National Cheng Chi University who oversaw the survey, attributed the lackluster outlook for the second quarter to a number of adverse factors, including mounting inflationary pressure, high housing price/income ratio, high share of housing investors, interest-rate hikes, and housing credit crunch, which more than offset some good news for the quarter, such as steady economic growth, high auction prices for state land, acceleration of urban renewal projects, relaxation of the conditions for preferential land-value increment tax rates, and upgrading of Taipei county to a municipality under the central government's direct jurisdiction.
The My Housing statistics show that Taoyuan County's housing market is laden with 17,000 unsold housing units, worth NT$100 billion, the highest, followed by Taipei County with 10,681 units or NT$91.1 billion in value, including 1,903 in Linkou, 1,140 in Tansui, and 669 in Shulin, the former two resulting from the housing construction craze there since last year.
The value of the unsold houses amount to around one-third that of new housing projects for entire 2007, which is estimated at NT$900 billion.
((PL)) (GE) | |
| | ![]() | | | Lai In-jaw Approved to Be President of Judicial Yuan
Taipei, Sept. 28, 2007 (CENS)--Lai In-jaw, incumbent justice of the constitutional court and former vice premier, was approved by the Legislative Yuan yesterday (Sept. 27) to serve as the president of the Judicial Yuan, and Hsieh Tsay-chuan, another incumbent justice, also received green light from the Legislative Yuan to assume vice presidency of the Judicial Yuan.
Lai and Hsieh obtained support of over half of the legislators yesterday, as required by the law, along with four candidates for justices nominated by President Chen Shui-bian. Four other justice nominees, however, failed to obtain endorsement of the Legislative Yuan, due to opposition of pan-blue alliance legislators on the ground of their pro-green political leaning. President Chen can nominate new justice candidates but it is understood that he will not do so.
Lai, Hsieh, both also justices, and the other four new justices will swear in office on October 1 for an eight-year term, working alongside the five incumbent justices with four years left for their term. This will be the first time for the constitutional court to operate short of its full amount of 15 justices.
Lai, born in 1946 and owing a doctorate degree in law from Harvard University, boasts various government stints, including deputy finance minister, lieutenant Taiwan provincial governor, and vice premier. He has good rapport with both blue and green political forces, being the right hand as the lieutenant provincial governor to James Soong, former Taiwan provincial governor and now chairman of People First Party. He also served as vice premier under President Chen's administration, when he oversaw many major economic and financial policies, including the establishment of a sound financial mechanism and acceleration of infrastructural projects. He opposed to President Chen's decision to stop construction of the fourth nuclear power plant, in vain, which led to serious political and economic upheaval subsequently.
((PL)) (GE) | |
| | ![]() | | | EMO Hannover 2007 Gets Top Marks From Exhibitors and Visitors
Taipei, Sept. 28, 2007 (CENS)--The six-day EMO Hannover 2007 exhibition held at the Messe Hannover of Germany, the world's largest machine-tool show, ended on Sept. 22 with a shower of accolades together with more exhibitors, visitors and international flair compared to last session held two years ago.
The European Committee for Cooperation in the Machine Tool Industry (CECIMO), organizer of the EMO Hannover 2007, said approximately 166,000 visitors came to the six-day show to buy machines, place orders, and find out about the latest developments in the world of metalworking. This represented an increase of 4% over the previous event two years ago, when EMO still ran for a total of eight days. Even the number of exhibitors—2,118 exhibitors from 42 different nations—was up 5%, and the amount of occupied floor space was also up by 12%, reaching a total of 180,000 net square meters.
The CECIMO said the EMO Hannover 2007 gave the international machine-tool sector an enormous shot in the arm. According to the official exhibitor survey, this year's EMO show generated an order volume of four billion euros. More than half of all exhibitors were anticipating a positive influence on subsequent German and European sales.
The general assessment among EMO exhibitors was positive. Over two thirds of them were more than satisfied with the run of the show. As one of the exhibitors put it: "This is the best show I ever experienced." An additional plus consisted of exhibitors being able to reach all their key industrial target groups, especially automotive manufacturers and subcontractors, the mechanical engineering industry and the entire spectrum of metalworking and metal processing.
Other important indicators for the leading role enjoyed by EMO Hannover were also up, including the percentage of visitors from outside Germany. Over 37% of trade visitors came from abroad, from a total of 80 different nations. Commensurate with the high level off European demand for machine tools, the number of visitors from Western Europe was up sharply, particularly from Switzerland, France, Italy, Sweden and Austria. The biggest contingents of visitors from overseas were from India and the U.S.
The CECIMO claimed the number of attending executives rose to nearly 60% of overall attendance. Exhibitors' perception of EMO as a unique forum for winning new customers was reinforced again this year, with over a third of all visitors attending EMO Hannover for the first time ever.
As the leading innovations forum for the metalworking industry, EMO Hannover 20 showcased a wide variety of innovations which are now market-ready following their unveiling at the previous event. One problem which was addressed in a number of new solutions this year involved the reduction of incidental time. Many machine-tool manufacturers have considerably reduced the time required for tool changing or now provide advance simulations of the setup procedure, considerably reducing machine overheads as a result. And the integration of control systems into the manufacturing process was another hot topic at this year's show. This year, machine-tool manufacturers teamed up with software providers to present brand-new approaches to enhancing customer productivity by optimizing the production process in terms of criteria such as production time or surface quality.
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| | ![]() | | | Bank of Taiwan "twAAA/twA-1+" Ratings Affirmed by TRC
Taipei, Sept. 28, 2007 (CENS)--Taiwan Ratings Corp. (TRC) recently affirmed its "twAAA" long-term and "twA-1+" short-term counterparty credit ratings on Bank of Taiwan (BOT). The outlook is stable.
The ratings on BOT reflect the bank's strong franchise and market position, satisfactory asset quality, high liquidity, and sound capitalization. Additional positive rating factors include strong government support given the bank's significant policy role and systemic importance to Taiwan's financial services industry. The government wholly owns BOT. Counterbalancing factors include the bank's weak profitability.
The TRC noted the BOT has a strong customer deposit base, benefiting from an extensive branch network and market confidence in its ownership. It commanded a pro forma domestic deposit share of 11% at the end of June 2007 (Central Trust of China merged with the bank on July 1, 2007).
BOT's asset quality is satisfactory and above the domestic industry average. The bank's ratio of nonperforming assets (including official NPLs and foreclosed property) was 1.7% at the end of June 2007. The bank's ratio of adjusted common equity to assets stood at 5.6% at the end of 2006.
BOT's profitability is poor because of low lending rates, especially on lending to government-related agencies, and high preferential deposit rates on military and civil service retirement funds. Although the bank has taken steps to build up its higher-margin loan portfolio, its ratio of net interest income to assets, which was 0.26% in the first half of 2007 (annualized) and 0.21% in 2006, remains marginal.
On Aug. 15 this year, the government announced its intention to group BOT, land Bank of Taiwan, and Export-Import Bank of the Republic of China—all wholly government owned—under a financial holding company structure by the end of 2007 and merge the three banks within three years. TRC said it would closely monitor the execution of this initiative, which may be subject to political and regulatory developments.
The stable outlook reflects TRC's expectation that the Taiwan government will maintain its strong support for BOT over the medium term. The bank is likely to gradually adjust its loan portfolio and revenue mix, but its profitability is likely to remain mediocre given highly competitive operating conditions. The outlook could be revised to negative, if the bank's profitability or asset quality deteriorates.
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| | ![]() | | | Hon Hai Inks Agreement to Set Up LED Production in Wuhan
Taipei, Sept. 28, 2007 (CENS)--Hon Hai Precision Industry Co., Ltd. recently signed an agreement with the administration of an industrial development zone in Wuhan of the mainland Chinese province of Hubei to set up a light-emitting diode (LED) production facility in the zone.
The company has begun integrating resources and its affiliates as part of its plan to enter LED business. Its Foxsemicon Integrated Technology Inc. is responsible for developing, manufacturing and marketing LED streetlamp modules. Foxconn Technology will expand its LED unit to enter into manufacturing and assembly of thermal modules for LED streetlamps.
In mid July this year, the company acquired a combined 46.6% stake of LED packager Advanced Optoelectronics Technology Co., Ltd. for NT$840 million (US$25 million at US$1:NT$33) with affiliates Foxsemicon, Foxconn and Innolux Display Corp.
The acquisition reflects the group's determination to break into LED-lighting business. Foxsemicon has long depended on Advanced for LED lamps for its LED streetlight modules and indoor light modules.
Industry watchers pointed out that Hon Hai had decided to open the factory in the mainland mainly in light of upbeat future of the mainland LED-lighting market. The mainland's 11th Five-Year Development Plan makes semiconductor lighting one of the mainland's 12 strategic industries to be urgently developed.
Mainland Chinese LED-lighting market alone is estimated to generate RMB4 billion (US$500 million at US$1:RMB8) worth of business opportunities throughout this year mostly thanks to aggressive power-saving projects drawn up by major cities there. The mainland's studies show that LED market there will grow at annual rate of 70% until 2009.
Market-research organization Strategies Unlimited of the United States projected LED lighting market to post compound annual growth rate of 40% worldwide between 2002 and 2008. The organization estimated lighting would account for 70% of LED applications in 2010, with the remaining portion filled by handsets.
Taiwanese LED insiders pointed out profits from LED streetlamps are quite lucrative, estimated to be NT$100 million (US$3 million) for every 10,000 LED streetlamps.
In addition to lighting-used LEDs, the planned factory will produce LED backlighting modules for liquid-crystal display televisions, mobile phones, notebook computers, digital photo frames, and auto lamps.
Hon Hai has shown strong interest in LED lighting market, which generates potential opportunities since energy shortage and carbon dioxide emission have become much concerned issues worldwide. LED lighting is said to be a power-saving and ecological light source.
Hon Hai is considered to be the most well-positioned Taiwanese manufacturer in LED segment because the company has outfitted itself with integrated manufacturing capability covering mold development and product finish.
Taiwanese industry watcher estimated that Hon Hai's next step in LED segment will be chip manufacturing, the only blank on its LED roadmap. They said Hon Hai's involvement in LED industry would help accelerate the development of world's LED-lighting industry thanks to its rich manufacturing resources. They estimated the company's involvement would help pare down the cost of an LED MR16 lamp to around NT$200 (US$6) from current NT$300 (US$9).
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| | ![]() | | | Motech Enters Thin Film Solar Cell Business
Taipei, Sept. 28, 2007 (CENS)--Motech Industries Inc., a leading Taiwanese manufacturer of solar cells, recently announced that it will branch out into manufacturing of thin-film solar cells from the sector of polycrystalline silicon-based cells.
The company's executives pointed out that the company will set up a pilot production line for thin-film cells in its laboratory in Colorado State to boost the ratio of converting solar radiation directly to electricity to over 10% from current 6-8% in two years. The company opened the laboratory late last month.
They added that the company will not procure turnkey plant technology for the production but develop the technology in-house.
Thin-film cell rivals polycrystalline silicon cell and mono-crystalline silicon cell. The latter two types are built on silicon wafers as substrate whereas thin-film cell is built on plastic, glass or metal substrate by applying a photovoltaic layer on it. Accordingly, thin-film solar cell reports lower photovoltaic conversion ratio than the other two types do.
Mono-crystalline silicon cells usually report conversion ratio of 15.5-16% while polycrystalline silicon cells claims ratio of 14.8-15%.
Thanks to low conversion ratio, thin-film cells are priced lower than the other two types and have shorter life spans. Thin-film cells' only advantage is its low materials costs.
Motech's major rivals at home including E-Tone Solar Tech and Kenmos Technology Co., Ltd. have recently separately unveiled their thin-film plans.
Kenmos announced it will set up a thin-film solar-cell venture at cost of NT$1 billion (US$30 million at US$1:NT$33) and it alone will put NT$450 million (US$13.6 million) into the venture.
E-Tone plans to open a thin-film cell factory at the Southern Taiwan Science Park, allowing it to expand into the new sector from polysilicon-cell sector.
Taiwanese industry watchers pointed out that many solar-energy new entrants are embracing thin-film production considering escalating shortage of polycrystalline silicon materials.
They pointed out boom business and high technological similarity have recently prompted the island's thin-film cell makers to poach talents from liquid-crystal display (LCD) manufacturers. They said LCD talents tend to defect to thin-film cell manufacturers on ground that solar-cell industry is believed to be more profitable than LCD since it is still infant, leaving a huge room for future growth.
When Motech announced its thin-film plan, it also announced an NT$1.84 billion (US$55.7 million) contract it signed to secure steady supplies of silicon materials over next nine years with German supplier Wacker Chemie AG. The materials procurement is part of Motech's plan to boost its capability of growing crystalline ingots by itself.
The company now puts out enough ingots for 10 megawatts of cells. It plans to ramp up the output for 100 megawatts of cells by the end of next year.
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| | ![]() | | | Big Brands Visit Taiwanese TFT-LCD Suppliers to Secure Panel Delivery for 2008
Taipei, Sept. 28, 2007 (CENS)--Senior managers of big international information technology (IT) brands have been eagerly visiting local thin film transistor-liquid crystal display (TFT-LCD) panel suppliers in a bid to assure ample panel supplies next year, according to industry sources.
The sources said that major procurement officials of Dell, HP, Samsung, etc. have been calling on local TFT-LCD manufacturers such as AU Optronics Corp. (AUO), Chi Mei Optoelectronics Corp. (CMO), Chunghwa Picture Tubes, Ltd. (CPT), HannStar Display Corp. etc. Such move implies a favorable business climate in panel business next year.
A senior research official of WitsView Technology Corp., a LCD market research firm, pointed out that in Taiwan both the top-two panel suppliers in Taiwan, AUO and CMO, would have only small-scale capacity expansion projects at their 7.5th-generation (7.5G) plants. All of AUO and CMO's 6G to 7.5G panel facilities would be utilized to produce LCD TV panels rather than information panels, he said.
Due to the limited capacities of Taiwan panel suppliers, Dell and HP, both are eyeing the world's No. 1 PC brand in 2008 by further expanding sales volumes, urgently need the support of steady supply of PC panels next year.
David Hsieh, president of DisplaySearch Taiwan Office and vice president of DisplaySearch Greater China, predicted that in 2008 the global TFT-LCD panel market will be like this year's--to undergo a minor sales decline in the first quarter (traditional off season), begin facing supply tensions from the second quarter, and the supply tension is expected to worsen in the second half. He added the panel supply shortage in the second half of 2008 is expected to be more serious than this year due to very limited new capacities to be added, despite expanding demand.
According to DisplaySearch's forecasts, the global demand for LCD TVs will reach 106 million units in 2008, compared with the supply of about 102 million LCD TV panels next year. In addition, he stressed, the panel supply volume is required to be about 10% higher than the demand volume for finished products because an extra panel is needed for after-sales repair and maintenance of every 10 sold.
In 2008, DisplaySearch said, the global demand for notebook PC panels would reach 120 million units, while that for LCD monitor panels about 180 million, compared with the expected supplies of about 132 million notebook PC panels and 194 million monitor panels. But supplies of mainstream-sizes panels in the two sectors, like that in TV panel segment, are expected to face a shortage due to the additional needed volumes for defect-product replacement, wastage, panel inventory, etc.
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| | ![]() | | | Ritek Wins Toshiba HD DVD Disc Order
Taipei, Sept. 28, 2007 (CENS)--Ritek Corp., the largest optical-disc manufacturer in Taiwan has won Toshiba of Japan's contract order for 2X HD DVD discs, each five of which are bundled for Toshiba's new HD DVD recorder/player sold in Japan now, according to industry sources.
The HD DVD format promoted by Toshiba has started a series of sales campaigns in Japan from this month so as to compete against the blu-ray type promoted by rival Sony. In order to promote its new HD DVD recorder/player model, Toshiba bundles five HD DVD discs with the new product for free of charge. Industry sources said that Toshiba would expand the sales campaign to global markets in the fourth quarter.
According to EDN, information sources confirmed that at sales points of Japan's 3C (computer, communication, and consumer electronics) distribution chain Bic Camera, the bundled HD DVD discs can be easily identified by their Ritek logo.
Ritek confirmed that it won Toshiba's HD DVD disc order but refused to comment on the order volume because it signed a confidential agreement with the Japanese customer. Institutional investors said that Ritek's shipment peak of the HD DVD discs would be in the fourth quarter and the company's profitability is expected to rise further.
HD DVD discs are made by a similar process to standard DVD discs and this similarity in format also allows for hybrid HD DVD discs, which have the high definition version of the film on one side of the disc and a standard definition DVD version on the other. Hybrid discs allow you to enjoy HD DVD quality at home but watch the film anywhere on a standard DVD player.
Statistics compiled by Japanese market research firm BOC showed that Toshiba is expected to sell 50,000 HD DVD recorder/player models in the fourth quarter thanks to its agreessive promotional activities, compared with about 23,000 units of similar machines pushed by the blu-ray front.
In 2008, the research institute estimated, the global shipments of blu-ray is expected to reach 300,000 units, that of HD DVD counterparts about 200,000, and that of HD DVD burner drives (for PCs) over 500,000 units.
Currently, only few companies have the capability to mass-produce HD DVD discs, including Ritek and CMC Magnetics Corp. of Taiwan, MBI of India, and some Japanese firms. Companies in Taiwan are expected to win increasing contract orders from international brands.
Ritek is currently the world's first and only company to have won the A-grade laboratory certifications for both blu-ray and HD DVD formats. In addition to the HD DVD order, the company is expected to land orders for blu-ray DVD discs in the first quarter of next year.
Thanks to its concentration on development of next-generation optical disc products, Ritek's quarterly profit margin recovered to 12% in the second quarter due to increased shipments of single-sided, double-layer DVD discs, while the firm is expected to challenge a 15% margin in the third quarter thanks to the start of shipment of HD DVD products.
Some institutional investors estimated that Ritek would set a quarterly earning record in the fourth quarter, a traditional peak season for optical-disc products.
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| | ![]() | | | Some Taiwanese Banks Stop Lending at Interest Rate Below 3%
Taipei, Sept. 28, 2007 (CENS)--To minimize loan risk among banks here, the Cabinet-level Financial Supervisory Commission (FSC) has decided to strictly monitor loan cases offered by domestic banks.
It is reported that FSC is going to examine a few large-scale loans to see of there are any violations by the underwriting banks. Sensing the crackdown, some banks have begun to stop extending construction loans and general loans with per annum interest rate of below 3%.
FSC has been reminding financial institutions here to earnestly adopt risk-control measures when providing loans and has included such risk control as part of its regular checks since May of this year. Recently FSC found that some banks did not follow the rule to control loan risk, so it has to keep a closer eye on large-scaled loans to help the underwriting banks to minimize possible risks.
Currently the average interest rate for construction loans is above 3.5%, and for general corporate loans is 4%. However, some banks may offer loans with interest rate of lower than 3% to prestigious construction firms or construction projects with good locations. Besides, some reputable companies may be provided with corporate loans at an even lower interest rate of 2%.
Some banks on the contrary decided to suspend loans with lending rate of lower than 3%. Although the domestic loan market has been quite unstable, yet the outstanding home-purchasing loans and construction loans have both witnessed an upward trend since 2001 and as of July of this year the former stood at NT$4.579 trillion (US$135.7 billion at US$1 = NT$33) and the latter at NT$957.7 billion (US$29.02 billion).
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| | ![]() | | | Taiwan Cooperative to Set Up FHC in 2008
Taipei, Sept. 28, 2007 (CENS)--Te-nan Hsu, chairman of Taiwan Cooperative Bank, recently declared that the bank had decided to apply to set up a financial holding company (FHC) next year. To reach the threshold requirement for a new FHC, the bank is now preparing to expand its capitalization.
The Cabinet-level Financial Supervisory Commission (FSC) recently stipulated that the capitalization and the assets for a new FSC should amount to NT$60 billion (US$1.82 billion at US$1 = NT$33) and NT$750 billion (US$22.72 billion), respectively. Currently Taiwan Cooperative registers paid-in capital at NT$47.7 billion (US$1.45 billion), far lower than the threshold. To reach the standard set by FSC, the bank is actively enlarging the size of its capitalization.
Insiders analyzed that Taiwan Cooperative would increase its capital by raising NT$10 billion (US$303 million) in cash from its stockholders and transferring NT$5 billon (US$151.5 million) from its profits. They said that the bank would not rule out the possibility of purchasing some small-sized life insurance firms or merging with other financial institutions to reinforce its strength.
To meet the future expansion, Taiwan Cooperative is planning to break ground next year for the projected new headquarters, which is located at the intersection of Pate Rd. and Changan E. Rd., downtown Taipei, and the bank will file the application with FSC for the establishment of FHC. The new headquarters will have three buildings with a total floor space of more than 20,000 pings (1 ping = 36 sq/ft), slated to complete in 2011.
Hsu also hoped that the bank could successfully transform into a FHC in the next couple years and move into the new headquarters soon after its completion in 2011.
((JL)) (GE) | |
| | ![]() | | | Unimicron Becomes World's No. 2 PCB Supplier
Taipei, Sept. 28, 2007 (CENS)--The Taiwan-based Unimicron Technology Corp., one of the world's leading suppliers of printed circuit boards (PCBs), posted sales revenue of US$1.25 billion last year, becoming the world's second-largest supplier of its kind, only trailing Japan's Ibiden, according to a report on the world's top 100 PCB makers in 2006 issued by N.T. Information.
In 2006, Taiwan's PCB makers ranking among the world's top 20 suppliers also included Nan Ya Printed Circuit Board Corp., Compeq Manufacturing Co. Ltd., Tripod Technology Corp. and Wus Printed Circuit Co., Ltd., all picking up from a ranking in 2005.
Among them, Unimicron posted sales revenue of US$1.25 billion to lead the industry on the island and take the second place in the world, followed by Nan Ya PCB with US$1.099 billion to rank No. 6 worldwide.
Compeq ranked No. 9 with sales revenue of US$732 million, Tripod No. 12 with US$632 million, and Wus No. 16 with US$580 million, with Foxconn Technology Group also scoring sales revenue of US$360 million to take No. 33 position in the world.
By merging with one of United Microelectronics Corp's affiliates to venture into the PCB making industry, as well as acquiring other companies and building own plants across the Taiwan Strait, Unimicron has been able to provide comprehensive product lines and been versed in making PCBs with chip size packages (CSP), high density interconnection (HDI) PCBs in the world. Besides, the firm also manufactures flexible PCBs and is to expand production capacity of rigid flex PCBs.
Unimicron reported combined revenue of NT$4.293 billion in August, growing by 13.89% from July to hit a historical high and 26.75% from a year earlier. This made the firm become Taiwan's first PCB supplier to see monthly revenue break the NT$4 billion mark. The firm also scored aggregate revenue of NT$29.24 billion over the past eight months, increasing by NT$2.379 billion from a year earlier, and is very likely to further push up its sales performance in September.
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| | ![]() | | | Ritek Joins Forces With Hon Hai Group to Produce Touch Panels
Taipei, Sept. 28, 2007 (CENS)--The Taiwan-based G-TECH Optoelectronics Corp., a company specializing in optical glass processing and affiliated with Ritek Corp., will join forces with Hon Hai Group to venture into production of touch panels, according to company sources.
G-TECH is to privately raise funds by issuing 70 million new shares, priced at NT$15 per share, and Hon Hai Group will gain 51% controlling stakes in the company. In short, Ritek, one of leading suppliers of ROM discs in Taiwan, will start cooperating with Hon Hai Group in the industry making touch panels.
In addition to optical glass cutting and processing, G-TECH is engaged in developing production process of conductive glass and providing specially processed glass for use in touch panels. With touch panels going popular, the company has reported shining sales performance this year, and hence attracted Hon Hai Group with strong R&D capability to gain controlling stakes in it.
This acquisition may drop Ritek to be the second-largest shareholder from the largest in G-TECH, but also introduce a certain strategic shareholder into the company. But, Ritek has yet to reveal any detail about the new shareholders.
Initially, in light of its promising glass processing business for small- and medium-sized display panels, G-TECH once carried out capital increase by issuing 3 million new shares at NT$11 per share early this year. It was reported that Hon Hai Group alone took all the new shares at that time; however, the group didn't confirm the deal.
Recently, the board at G-TECH newly approved a project to privately raise funds by issuing 70 million shares for the second time in the same year, which will help the company boost its capitalization to NT$1.28 billion from NT$580 million. The project is scheduled to be completed in early October.
Incidentally, disc suppliers on the island are actively diversifying their business operations this year, with CMC Magnetics Corp. venturing into making thin-film solar cells, Gigastorage Corp into electrically conductive adhesive for solar cells, Lead Data Inc. into digital photo frames, Infodisc Technology Co., Ltd. into solar cell products, Prodsic Technology Inc. into light-emitting diode (LED) applications and Ritek integrating a supply chain of parts and components for display panels.
Ritek has already spun off its business of making indium tin oxide (ITO) conductive glass into a new affiliate, and reinvested G-TECH to solicit strategic shareholders to integrate resource for producing touch panels.
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| | ![]() | | | Alex Global Becomes World-class Supplier of Forged Wheel Rims
By QUINCY LIANG
Not satisfied with being the world's largest manufacturer by volume of aluminum-alloy wheel rims for bicycles, Alex Global Technology Inc. is now developing itself into a world-class maker of forged wheel rims for a wide variety of transportation vehicles including trucks, passenger cars, powered two-wheelers (PTWs), and all-terrain vehicles (ATVs).
The company is spending a total of NT$3 billion (US$90.9 million at NT$33:US$1) to set up Taiwan's first integrated cold-forging production line. Around 4,000 forged wheel rims (mostly for trucks) will be produced on a trial basis in 2007; later on production will be expanded to include rims for passenger cars, ATVs, and heavy-duty PTWs, and annual output will hit five million units.
According to Alex's assistant vice president, Max Huang, the company began planning its new production line back in 2002 following extensive evaluation and close collaboration with industry experts, research institutes, and educational institutions.
As the first step in its expansion project, the company spent three years building Taiwan's first aluminum extrusion plant to ensure a stable supply of high-quality material. Its aluminum furnace was completed in early 2007, and trial production of forged wheel rims for trucks began in the first half of that year. Passenger car rims are expected to follow by year-end.
Forged aluminum wheel rims offer a number of advantages, Huang says, that make them worth the extra cost compared with steel or die-cast products. And their prices are expected to drop as increasing demand paves the way for greater economies of scale.
One advantage is light weight, leading to fuel savings. A 24.5-inch forged truck rim, for example, weighs only 22.5 kilograms, compared with 45-50 kg for a steel rim or 23-24 kg for a die-cast aluminum rim. The use of forged rims can result in fuel savings of 5% to 8%.
The Safety Advantage
A second advantage is safety; forged rims offer much better heat dissipation, which is especially important for long-distance trucks. A lower rim temperature results in less tire fatigue and better braking.
Cold-forged rims are also the hardest, Huang says, because the die-casting process always generates microscopic air holes that weaken die-cast rims and make them more subject to failure. To achieve the same hardness, Huang claims, a die-cast rim has to be 30% heavier than its cold-forged counterpart.
Although Alex is new to the forged wheel rim line, it intends to be a total-solution provider through the combination of a stable supply of the finest materials, the most advanced production equipment and technology, and outstanding design capability.
"As a newcomer," Huang comments, "we have to position our products clearly by offering not only the best quality but also state-of-the-art design. We chose to start out our forged-rim business with truck and bus products, because most original equipment (OE) rim suppliers provide traditional-type rims, with few styling changes, to truck and bus makers."
He adds that the increasing trend of outsourcing by European and American auto makers to Asian suppliers will smooth the way for his company's forged-rim business.
"We're devoting every possible effort to upgrading our forging technology to bring it even with, or even in advance of, our counterparts in Europe and America," Huang asserts. "Since the investment in a forging line is more than 10 times the cost of a die-casting line, and the level of technology required is also much higher, it will be some time before followers in mainland China are able to catch up. So we're entering this new business at the right time, especially with auto makers, notably in the United States, increasingly adopting forged wheels." (September 2007)
Captions:
1.Max Huang, assistant vice president of Alex Global Technology.
2.Alex turns out high-end cold-forged wheel rims. | |
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