| Prime News | | ![]() | ![]() | Thirteen Banks May Incur NT$4 B. of Loss From SIV Exposure
Taipei, Nov. 2, 2007 (CENS)--Thirteen domestic banks may incur NT$4 billion of loss from exposure to SIV (structured investment vehicles) totaling NT$21.8 billion, due to the ripple effect of the U.S. subprime housing-loan storm, said the Financial Supervisory Commission (FSC) yesterday (Nov. 1).
Of the 13 banks, Bank SinoPac reported the largest exposure of NT$11.3 billion, for which it has made NT$2.3 billion of provision for possible loss.
Susan Chang, vice chairperson and spokesman of the FSC, stressed that the exposure level, based on the figure on Oct. 25, is still manageable for domestic banks, adding that those banks have made provisions totaling NT$4 billion for possible loss. The FSC is still collecting statistics concerning exposure and possible loss to SIV among domestic insurance firms and fund managers.
SIVs are financial instruments, in the form of either long-term securities or short-term commercial papers, issued by companies set up by leading international banks, such as Citibank, HSBC, and Standard Charter, backed by their assets of quality housing loans with AA or AAA grading, a market which has also been affected seriously by the subprime mortgage storm.
Meanwhile, Susan Chang pointed out that as of the end of September, of 39 domestic banks, 21 domestic banks had had U.S. subprime loan-related exposure totaling NT$56.3 billion, up from the initial statistics of 16 banks and NT$40.4 billion of exposure, with aggregate loss estimated at NT$3 billion. She noted that the exposure is also manageable, especially compared with US$10 billion of exposure of Chinese banks.
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| | ![]() | | | Eva Sole Beneficiary of New Taiwan-Japan Aviation Pact
Taipei, Nov. 2, 2007 (CENS)--With China Airlines still under investigation for the fire incident of its plane in Naha Airport in August, Eva Airways has become the sole beneficiary of the new Taiwan-Japan aviation pact, effective Nov. 1, pocketing all the new air routes, including regular flights to Miyazaki-ken in Kyushu and Komatsu of Ishikawa prefecture of Honshu, as well as the fifth freedom right capable of extending the Taipei-Osaka flight to either Los Angeles or Seattle.
Eva Airways has reportedly decided to inaugurate the new flights routes to Miyazaki-ken and Komatsu early next year, as well as the extended flight from Osaka to Los Angeles next spring. As a result, China Airlines will have to cease its years-long chartered flight service to Komatsu, numbering some 100 annually now, as it has been denied any new aviation right for one year due to the fire accident, although the accident may be caused by design problem on the part of the plane maker Boeing according to the initial investigation.
Chang Kuo-cheng, director general of the Civil Aeronautics Administration (CAA), under the Ministry of Transportation and Communications, pointed out that although CAA also feels CAL might be an unlucky innocent victim of the accident, CAA can do nothing for the case, due to the set rules of game, pledging to compensate CAL in the next round of air-right distribution should final investigation outcome confirm CAL's innocence.
Officials noted that the major boon of the new aviation pact for Eva is the connecting flight to the Los Angeles, boasting heavy traffic demand.
The new pact also allows to new Taiwanese airliners to engage in the chartered flight service between Taiwan and Japan, enabling Far Eastern Air Transport and TransAsia Airways to join the market, competing head-on with CAL, Eva, Mandarin Airlines, and Uni Air now offering the service.
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| | ![]() | | | Delta Sees EPS in First 3 Quarters Hit Record High Since Listing
Taipei, Nov. 2, 2007 (CENS)--Delta Electronics, Inc., one of Taiwan's leading manufacturers of power supplies, posted NT$5.45 (US$0.16 at US$1:NT$32.4) in after-tax earnings in the first three quarters of this year, hitting the highest record since it went public on the Taiwan Stock Exchange in 1988.
Of its performance in the first three quarters, Delta saw sales, after-tax earnings and return on equity in the third quarter hit historic quarterly records. On the other hand, the company saw operating expense rate in the third quarter dip to a new low.
Delta chief executive Ying-chun Hai said his company will see quarterly sales and earnings continue to grow in the fourth quarter of this year.
Hai stated power supplies for LCD (liquid crystal display) TVs will be the engine behind Delta's growth in the foreseeable future. At present, the company's major clients are the world's top-tier LCD TV manufacturers.
Delta predicted it would challenge a 15% market share globally for the sales of power supplies used in 32-inch and over LCD TVs by the end of this year. The company said it would see an increase of orders for the power supplies for large-sized LCD TVs next year.
At a recently held institutional investor conference, Delta showcased its latest developed innovative product—the high-density, high-performance telecom power supply, which is 31% lighter than the existing model with gross weight decreasing to two kilograms from five kilograms.
Despite the hike in material prices, Delta still kept gross profit margin at 21.2% with operating expense rate hitting a historic low record of 8.2% in the third quarter of this year.
Thanks to the addition of NT$1.55 billion (US$47 million at US$1:NT$32.4) in earnings from non-core business, the company saw after-tax earnings in the third quarter of this year grow 28.5% to reach NT$4.679 billion (US$144.41 million).
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| | ![]() | | | Cathay Century Insurance to Set Up Shop in Shanghai in 2008
Taipei, Nov. 2, 2007 (CENS)--The Cathay Financial Holdings Co.'s two subsidiaries, including Cathay Century Insurance Co. and Cathay Life Insurance Co. will jointly invest RMB400 million to set up a property insurance company in mainland China next year.
The proposed 50-50 joint-venture company between Cathay Life and Cathay Century is expected to begin operations in the middle of next year as the first Taiwanese-invested property insurance concern in the mainland.
Both Cathay Life and Cathay Century reaped bountiful returns with per-share earnings hitting the historic high in the first three quarters of this year. Cathay Life registered NT$25.265 billion (US$779.78 million at US$1:NT$32.4) in after-tax earnings, or NT$4.98 (US$0.15) in after-tax earnings per share, in the first three quarters of this year. Cathay Century posted NT$994 million (US$30.67 million) in after-tax earnings, or NT$4.29 (US$0.13) in EPS, in the same period.
With the earnings contributions from life insurance, Cathay FHC registered NT$32.979 billion (US$1.01 billion) in after-tax earnings, or NT$3.59 (US$0.11) in EPS, in the first three quarters of this year, standing firmly as the largest among 14 domestic FHCs.
Cathay FHC is the bellwether in domestic financial sector to invest in the mainland. Following its establishment of Cathay Life Insurance Shanghai in 2005, Cathay Insurance Shanghai will soon tap the mainland China property-insurance market, making Cathay FHC the first domestic financial group to engage in life and non-life insurance businesses in the mainland.
C.K. Lee, Cathay FHC's chief strategy officer, said his company has obtained approval from Taiwan's Cabinet-level Financial Supervisory Commission and the Ministry of Economic Affairs' Investment Commission and the mainland's China Insurance Regulatory Commission for the establishment of Cathay Insurance Shanghai.
According to the mainland's insurance regulations, the proposed Cathay Insurance Shanghai has to be inaugurated one year after the receipt of official approval.
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| | ![]() | | | Taiwanese GPS Maker Acquires Tele Atlas for Astronomical Price
Taipei, Nov. 2, 2007 (CENS)--fering 2.4 billion euros (US$3.3 billion), Garmin Corp. of Taiwan recently outbid its Netherlands rival TomTom International BV to acquire digital navigation-mapping supplier Tele Atlas, which is also headquartered in the Netherlands.
Garmin is currently the world's No.2 supplier of global positioning system (GPS) equipment. The company's price offering is around 15% more than TomTom's.
Garmin executives pointed out that the acquisition just comes at right timing in consideration of the new evolution in world GPS market.
Garmin's share price fell a steep 10.86% to close at US$107.4 per share on Nasdaq on Oct. 31 on fears that the acquisition price is too high only to become a financial burden. Tele Atlas's share price, on the contrary, substantially surged 14.87% to close at 27.58 euro apiece.
Taiwanese industry watchers pointed out that the acquisition price is 4.5 times that Acer spent on Gateway and enough for constructing two Taipei 101 Towers.
Garmin executives pointed out that the deal can become legalized only after passing antitrust review in Europe and two-third major approval at Tele Atlas's shareholder conference. They added that their company had raised enough capital for the acquisition.
Industry watchers pointed out that Tele Atlas is Garmin's only choice since Nokia already procured Navteq, another leading digital navigation-mapping supplier, for US$8.1 billion.
The competition for Tele Atlas between Garmin and TomTom has drawn attention in world GPS industry. TomTom has mainly depended on Taiwanese contact suppliers like Quanta Computer and Inventec for the gears.
Garmin reported after-tax net income of US$194 million for last quarter, gaining 57% from the same period of last year. In the meantime, its revenue was US$729 million, increasing 79% year over year.
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| | ![]() | | | Microsoft Taiwan Partners With Multinationals on Telecom Integration Business
Taipei, Nov. 2, 2007 (CENS)--Microsoft Taiwan yesterday announced it will team up with Asustek Computer, HP Taiwan and Nortel Taiwan to make foray into the market for telecom-integration services including integrated telephone, instant messaging, Internet telephone and electronic mails.
Microsoft Taiwan executives pointed out that software will dominate enterprise telecom-integration market over the next 10 years. Citing an IDC study, the company's general manager, A.C. Tsai, noted that global market of telecom-integration service will reach US$4.8 billion in revenue this year and US$14.5 billion in 2011.
Addressing the market, Microsoft Taiwan yesterday unveiled Office Communications Server 2007 (OCS) to integrate telecom software and hardware inside and outside corporations. The software allows all employees to easily share creativity and information with people inside and outside corporations through a single platform that incorporates VoIP, e-mail, Web teleconferencing, and instant messaging services.
The partnership will cash in on Asustek's expertise in handheld device, Nortel's profession in switchers and servers, HP's specialization in telecom-installation service and Microsoft's dominance in software technology to enter the market.
So far, Taiwanese enterprises including First International Computer, BenQ and Quanta Computer have equipped themselves with OCS2007.
Quanta executives pointed out that the company has boosted its telecommunications efficacy by 30% and reduced e-mail communications by 40% after installing OCS2007. This, they stressed, will help boost the company's competitiveness and efficiency.
Microsoft Taiwan's executives pointed out that telecom-integration platform allows incoming messages to be forwarded to intended receivers' computers if they are not available to answer their office phones. The receivers can answer through instant-messaging system or Internet telephone.
They estimated corporations can eliminate 25 to 30% of telecommunications costs by using the platform and see 500% return in three years from their investment in installation of the platform.
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| | ![]() | | | AUO Leads Large-sized TFT-LCD Shipment in Q3: Displaybank Data
Taipei, Nov. 2, 2007 (CENS)--The global shipments of large-sized thin film transistor-liquid crystal display (TFT-LCD) panels totaled 107 million units in the third quarter this year, a record that exceeds 100 million units for the first time in the quarter, according to South Korea-based display market research institute Displaybank.
The third-quarter large-sized panel shipment topped the total annual volume of such products in year 2003, the institute added.
Displaybank attributed the record quarterly shipment to the third-quarter peak effects and rising demand from the notebook PC and LCD TV markets.
In the third quarter, global revenues from panels also jumped by 23% from the previous quarter, and 45% from the same period of 2006, to reach US$20 billion, the research firm said. Such upward trend in revenues could be attributed to the rising panel prices. In the third quarter, the average-panel-selling price (ASP) was up by 10% quarter-on-quarter to US$187, while the panel price per inch also climbed 7% to US$8.9, Displaybank said.
Regarding major players in large-sized panel business in the third quarter, Taiwan-based AU Optronics (AUO), the No. 1 TFT-LCD manufacturer on the island, leaped to the top position for the first time in terms of quarterly shipment of 22.3 million panels, followed by Samsung Electronics' 22 million and LG.Philips LCD Co., Ltd. (LPL)'s 21.2 million units.
In terms of revenue during the period, however, Samsung led by taking a 22.4% share, followed by LPL (20.6%) and AUO (20.1% ) of the total market.
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| | ![]() | | | Chi Lin Sells Touch-screen, Small- and Medium-sized LCM Biz to Affiliate Chi Hsi
Taipei, Nov. 2. , 2007 (CENS)--Chi Lin Technology Co., Ltd. of the Chi Mei Group recently sold its touch-screen panel and small- and medium-sized LCD module (LCM) businesses to affiliate Chi Hsin Electronics Corp., which is expected to better achieve economy of scale with the added small- and medium-sized panel capacity.
According to Chi Lin, the deal was worth about NT$1.8 billion (US$54.55 million at US$1: NT$33) and the major goal of the sale is to better integrate related small- and medium-sized panel resources of the Chi Mei Group and avoid resource-use conflicts.
Most market observers are optimistic about next year's small- and medium-sized thin film transistor-liquid crystal display (TFT-LCD) panel market because all the newly added panel capacities are next-generation production lines for large-sized (over-10-inch) panel products, while the small- and medium-sized panels are still facing strong demands from the consumer-electronics application markets.
At least two local large-sized panel manufacturers have decided to upgrade their small- and medium-sized panel production volume, including HannStar Display Corp. that plans to spare about one-sixth of its fifth-generation (5G) capacity for small- and medium-sized products while Chi Mei Optoelectronics Corp. (CMO) has decided to utilize its 3.5G and 4G plant as major supply sources of such products.
Industry sources pointed out that Chi Lin's efforts have realized improved efficiency and growth in its touch-screen panel and small- and medium-sized LCM businesses. To achieve integration and stronger competitiveness, Chi Mei Group decided to enable Chi Hsin access related resources from Chi Lin and CMO so as to better achieve economy of scale.
The sources added that the small- and medium-sized panel sales have been heating up due to the increasing demands from digital photo frame, smartphone etc. application markets. In the past, CMO utilized mainly its 3.5G plant to produce the small- and medium-sized panels but contracted most of the LCM production to outside suppliers so its profit margins were relatively lower.
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| | ![]() | | | Outstanding Consumer Loans See Slow Growth in September
Taipei, Nov. 2, 2007 (CENS)--Taiwan's outstanding consumer loans and construction loans together amounted to NT$6.8215 trillion (US$206.71 billion at US$1 = NT$33) at the end of September of this year, slightly increasing by NT$7.6 billion (US$230.3 million) from a month earlier, according to the statistics released by the central bank here.
Nevertheless, the outstanding home-purchase loans and construction loans in the same month stood at NT$4.63 trillion (US$140.3 billion) and NT$985.4 billion (US$29.86 million), respectively; both hitting the highest of their kinds. However, construction loans experienced a minimal monthly rise of NT$4.616 billion (US$139.88 million), which tumbled by NT$18.7 billion (US$566.67 million) from the corresponding figure of a month earlier. And the loans for home retrofits or repairs edged up by NT$430 million (US$13.03 million).
Insiders said that the sharp price hikes in commodities and consumer goods have forced the central bank to raise interest rates, which has discouraged willingness to buy homes among consumers, hence slowing the growth in real estate market and related financing business, with banks also tightening up credits on such loans to avoid evidently growing risk.
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| | ![]() | | | Taiwan Collects Import Tax Revenues of NT$246.9 B. in First 9 Months
Taipei, Nov. 2, 2007 (CENS)--The Taiwan's Directorate General of Customs under Ministry of Finance (MOF) collected customs import tax revenues of NT$246.9 billion (US$7.482 billion at US$1 = NT$33) in the first three quarters of this year.
Of such tax revenues, business taxes contributed the highest total of NT$155.4 billion (US$4.71 billion), followed by customs tax and commodity tax totaling NT$50.7 billion (US$1.54 billion) and NT$15.6 billion (US$472.73 million), respectively.
In the same period, import duties collected by Keelung Customs Bureau contributed the lion's share of 46.2% or NT$114.1 billion (US$3.46 billion). Kaohsiung Customs Bureau followed with a share of 32.6% or NT$80.4 billion (US$2.44 billion) and Taichung Customs Bureau of 21.2% or NT$52.3 billion (US$1.58 billion).
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| | ![]() | | | Compal Expects NB PC Shipment to Grow by 30% in 2008
Taipei, Nov. 2, 2007 (CENS)--With the market for notebook personal computers (PC) turning strong, Compal Electronics Inc., one of world's leading suppliers of the products, expects its full-year notebook PC shipment to grow by 30% to 30 million units in 2008 from 23 million units estimated for 2007, according to Ray Chen, president of the firm.
On the other hand, Compal's shipment of liquid crystal display (LCD) TVs is expected to hit a historical high in the fourth quarter of this year, higher than the corresponding figure scored for the first three quarters. Next year, the firm projects shipment to increase by five folds from this year.
Following Quanta Computer Inc., the world's leading supplier of notebook PCs and already raising its notebook PC shipment projection to 30 million units for this year from 28 million units, Compal has also raised its projection to 23 million notebook PCs for the year from 22 million units.
Chen noted that tight supply of battery packs undermined the growth of Compal's shipment of notebook PCs in the third quarter. But, with the shortage already eased, the firm predicts its shipment to move up 10% in the fourth quarter, and will ship about 30 million units in 2008.
Compal commands about 22% of the global market for notebook PCs this year, and the figure is expected to rise to 25-26% next year, when its clients will increase their orders to the firm. Chen said that with a stable growth of 2 to 3 percentage points annually, Compale's market share is estimated to reach 30% in 2010.
Although supply of display panels will turn tighter next year, Compal won't be much affected, because its clients have already secured sources of display panels for use in the year.
Thanks to orders from Toshiba in the fourth quarter, Compal has seen its shipment of LCD TVs sharply increase to 120,000 units in the quarter from 80,000 seen in the preceding three quarters, smoothly attaining full-year shipment of 200,000 units.
Chen noted that the company's shipment of LCD TVs is estimated to reach one million units for next year. Noteworthy is that although winning orders for LCD TVs from Toshiba, Compal loses the client's orders for notebook PCs to Quanta. This makes institutional investors skeptical about Compal's overall gross profits next year.
Chen said that Compal's gross profit rate is estimated at about 5% for the fourth quarter of this year, higher than the figure posted in the third quarter, and will stay at a level of about 4.8% in the first quarter of next year.
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| | ![]() | | | Taiwan's LED Makers Post Robust Profits in First 3 Quarters
Taipei, Nov. 2, 2007 (CENS)--Taiwan's light-emitting diode (LED) makers scored robust profits in the first three quarters of this year, with smaller ones, including Bright LED Electronics Corp., Unity Opto Technology Co. and Formosa Epitaxy Inc. (FOREPI), witnessing their operating incomes gradually increase quarter by quarter, according to company sources.
In the meantime, among Taiwan's larger suppliers in the sector, Everlight Electronics Co., Ltd. posted the highest net earnings of NT$4.32 per share, while Epistar Corporation saw its pretax profits hit a new high in for the same nine-month period.
FOREPI still suffered operating losses in the fourth quarter of last year and the first quarter this year, but the firm managed to post a positive profit rate of 5.48% in the second quarter of this year, which shot up to 15.75% in the third quarter.
FOREPI noted that its LED backlight products, which bear higher profits, accounted for 60% of its total revenue. Aided by its expanded capacity and improved production, the company enjoyed significant growths in operating profits in the third quarter, and is carrying out its capacity expansion till the end of this year.
Institutional investors indicated that adding new capacity to sustain mass production in the fourth quarter, FOREPI may fail to maintain its defect-free rate at a stable level, which, in turn, may cause its gross profit rate to drop to 27-28% for the quarter, down from 30.4% posted in the third quarter. But, with strong demand for small- and medium-sized backlights in the fourth quarter, FOREPI is expected to record a new high in its single-month revenue in the quarter.
Since the fourth quarter of last year, Bright LED has seen its operating profit rate grow quarter by quarter to 12.27% for the third quarter of this year. Thanks to robust shipment in October and November, the company is very likely to beat a record high in its single-month revenue in the fourth quarter.
Bright LED added that its single-month shipment of LED backlights for mobile phones will probably double in the fourth quarter from the third quarter, making institutional investors predict the company's compound gross profit rate for the quarter to reach 28%.
Over the past one year, Unity's operating profit rate has been trending upward. Benefiting from explosive need for LED backlights in 7-inch and other small-and medium-sized display panels, the company's shipment of such products has grown month by month.
Unity noted that its production capacity of LEDs for backlights will be expanded to 100 million units per month from existing 70-80 million units as of the end of this year. With an additional monthly capacity of 50 million units to be launched in the first half of next year, the company's monthly capacity will then reach 150 million units. With expanded capacity, institutional investors project Unity's single-month revenue to shoot up 80% to NT$500 million next year.
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| | ![]() | | | Near-eye Displays and Pocket Projectors
Taiwan's makers of handheld devices such as portable media players, DVD players, and mobile TVs are gearing up to enhance the viewing experience of users by offering products with pocket or embedded projectors and near-eye displays (also called head-mounted displays, or HMDs), according to the iSuppli Corp., a market research company.
HMDs are placed on helmets or visors close to the user's eyes, providing a virtual image that is larger than the physical dimensions of the display. The virtual image can range in size from 20 to 100 inches, providing a hugely improved viewing experience compared with the 2- to 8-inch screens typically used on mobile phones and video iPods.
ISuppli attributes the move toward HMDs to the love that consumers have for tiny handheld electronic devices and the dislike they harbor for tiny displays. Jennifer Colegrove, a senior analyst for display technology and strategy at iSuppli, explains that pocket or embedded projectors and HMDs offer not only a larger viewing area but also lower cost, less power consumption, and reduced weight and size.
Global consumer HMD shipments are expected to rise to 1.3 million units by 2012, up from 325,000 units this year, according to iSuppli. Over the same period, pocket-projector shipments are forecast to grow from 41,000 to 1.7 million units.
In the consumer market, HMDs are used mostly with iPods, mobile phones, and PCs to play video games and watch movies and TV programs. The market for these devices is gaining momentum, thanks to their advantages in the areas of image size, power consumption, and privacy, the research firm explains.
ISuppli points out that the original suppliers of HMDs back in the 1990s and early 2000s, including Planar, Olympus, and Liquid Image, have withdrawn from the business. However, they have been replaced by a new wave of HMD manufacturers who are striving to improve ergonomic design and offer slimmer, lighter, and cheaper products.
The market research firm says that the market for pocket projectors, defined as those that weigh under two pounds (about 0.9 kilograms) and have a size smaller than 60 cubic inches (983 cubic centimeters) without a battery, is growing due to strong demand for portable presentation equipment. Pocket projectors, most of which run on batteries, are preferred by travelers for their ability to deliver presentations to small groups of people instantly, at any time and any place.
All of the pocket projectors that are commercially available today weigh between one and two pounds (04.5-0.9 kg). Even lighter ones weighing less than one pound have been demonstrated, iSuppli says, but are not yet on the market.
Pocket projectors available today are rather similar in design and specifications, but those on the market in the future will be more diversified. They will also take advantage of micro-display technologies such as those involving LCDs, liquid crystal on silicon (LCOS), and digital light processing (DLP). Their light sources will include lamps, LEDs, lasers, and LED/laser combinations.
There will be significant growth opportunities for miniature projectors in the future, iSuppli believes. With rear-projection TVs losing momentum, microdisplay manufacturers now have an chance to expand their markets on a large scale. | |
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