| Prime News | | ![]() | ![]() | Emirates Airlines to Recruit Pilots in Taiwan
Taipei, Oct. 8, 2008 (CENS)--To solve its pilot shortage resulting from rapid expansion of its fleet, Emirates Airlines, a fast emerging star in the international aviation market, is scheduled to conduct open pilot recruitment in Taiwan on October 10, aggravating concern among domestic airlines about the pilot-drain problem.
Taiwan, along with Singapore and Hong Kong, is one of the three areas for the recruitment operation, designed to support the ambitious fleet expansion project of the airline, which has placed orders for 47 A380 and 42 Boeing 777, worth some US$20 billion, making it one of the largest buyers for the next-generation jetliners.
Founded in 1985, the Dubai-headquartered Emirates Airlines has emerged as a new shining star in the international market in recent years, thanks to its aggressive development strategy and support of the Dubai government's financial strength, underscoring the latter's determination to develop Dubai into a regional economic, trade, and transportation hub. With a 103-plane fleet now, the airline boasted US$8.5 billion of turnover and 17 million passenger trips for fiscal 2006, ended March 2007.
Emirates Airlines will be the second offshore airline poaching domestic pilots in recent years, following China's Sichuan Airlines, which just recruited some 20 Taiwanese pilots this year, on top of its recruitment of eight pilots here in 2005, in order to meet the need of its fast expanding business.
Sichuan Airlines has managed to recruit many copilots from Taiwan, offering them pilot position with monthly pay of 40,000-50,000 yuan, plus a free house, which offsets the difference between the pay levels of Chinese and Taiwanese pilots, with the latter now standing at US$10,000. The conditions are attractive to those copilots, who are having difficulty getting promotion to pilot due to business stagnation of domestic airlines.
Industry insiders expect many domestic pilots responding to recruitment of Emirates Airlines, which is offering monthly pay of US$12,000-13,000. The trend has alarmed domestic airlines, as China Airlines and Eva Airways have each spent some NT$100 million training own pilots in recent years, around NT$2-7 million for each pilot. China Airlines, for instance, has planned to sue its pilots shifting to Sichuan Airlines recently, demanding them to pay several millions of NT dollars of compensation for training expenses.
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| | ![]() | | | MOEA Suffering Current of Early Retirement
Taipei, Oct. 8, 2007 (CENS)--Tsai Lien-sheng, director general of the Intellectual Property Office, under the Ministry of Economic Affairs (MOEA), will take an early retirement on December 3, joining the current of early retirement at the ministry recently.
Statistics of the MOEA's personnel department show that 26 MOEA officials have retired ahead of the compulsory retirement age of 65 recently, including many at executive positions.
Tsai, who just turns 60, boasts complete government service experience and is a potential candidate for the vice minister of the MOEA.
"I have been undertaking heavy work pressure in recent years, without support of sufficient resources," remarked Tsai on his retirement, which insiders say reflect the common frustration and disappointment of many government officials under the ruling DPP (Democratic Progressive Party) regime due to the frequent interference with government administrative affairs by politicians.
Another noticeable MOEA official calling quit is Kuo Nien-hsiung, deputy director general of the Industrial Development Bureau, who just turns 55. Steve Ruey-loong Chen, economics minister, has turned down his request, entreating him to stay on, but Kuo's determination appears to be unchanged.
Chang Yung-hsin retired from the position of deputy director general of the Department of Investment Services last October, when he was less than 55 years old. "There was no target and no prospects for my work," explained Chang of his decision for early retirement.
Another retired ranking MOEA official criticized that election victory of the DPP has taken precedence over the professional consideration for economic policies, confusing the goals of many officials for their works.
He worried about the disruption of talents at the MOEA under the trend.
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| | ![]() | | | Taiwan Cement to Own 30% of Southern China Cement Market in Five Years
Taipei, Oct. 8, 2007 (CENS)--Taiwan Cement Corp., one of Taiwan's leading producers of cement, said it would see annual production capacity reach 45 million metric tons in 2012 in the wake of merging with Chia Hsin China. The production capacity will help Taiwan Cement to grab a 30% share in southern China cement market.
Chia Hsin said its Jingyang and Union cement plants located in the mainland each scored over 20 million renminbi in earnings in the first half of this year. Thanks to the price hike in cement in the mainland market in September, these two plants will see earnings in the second half of this year exceed that of the first one.
After expanding its share in southern China, Taiwan Cement will continue to extend its antenna to central and northern China region, struggling for the No.1 spot in mainland's overall cement market.
Taiwan Cement chairman Leslie Koo said his company will see annual capacity amount to 22 million metric tons of cement in 2008 in the wake of the mass production of Yingde plant of Guangdong province and a grinding plant of Fuzhou of Fujian province. At that time, the company will kick off a second-phase expansion project.
Koo noted his company would see overall production capacity reach 35 million metric tons of cements across the Taiwan Strait after the first-phase expansion project is completed in 2008. The company estimated its overall annual production capacity across the Taiwan Strait will challenge the goal of 50 million metric tons of cement in between 2010 and 2012.
Due to the price hike in cement in southern China region, Taiwan Cement will see earnings contribution from the mainland amount to 150 million renminbi this year. The company noted its Yingde plant in Guangdong province has begun making profits since the first quarter of this year.
A foreign investor noted Taiwan Cement and Chia Hsin Cement would enjoy structural improvements in earnings and land assets in the wake of the merger of between Taiwan Cement International and Chia Hsin China.
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| | ![]() | | | Wintek Becomes World's No.2 Producer of Cellphone Panels
Taipei, Oct. 8, 2007 (CENS)--Wintek Corporation, one of Taiwan's leading manufacturers of flat panel displays, rose to the world's No.2 producer of cellphone panels with a market share of 12.3% in the second quarter of this year, according to a survey conducted by DisplaySearch, a well-known industry researcher.
Affected by the slide in market share of its big cellphone client—Motorola Corp., the Japan-based Sharp Corp. retreated to No.3 position with a market share of 11.4% in the second quarter of this year from No.1 earlier, replaced by Samsung SDI Co. of South Korea with a 13.5% market share. Another Taiwanese manufacturer in this field—Toppoly Optoelectronics Corp. stood at the fifth place, behind Epson.
According to statistics conducted by the DisplaySearch, Wintek shipped 34 million units of cellphone panels in the second quarter of this year, up 56% year-on-year and 32% from the preceding quarter.
The DisplaySearch's tallies showed because of Motorola's slump in cellphone market share, total shipments of cellphone panels amounted to 32 million units in the second quarter of this year, down 36%, or 18 million units, from the preceding quarter's 50 million units.
Epson and Toppoly shipped 30.4 million units and 24.9 million units of cellphone panels in the second quarter of this year, respectively.
At present, the there is a shortfall in supply of high-price LTPS (low-temperature poly-silicone) cellphone panels because of the increased demand of Apple Computer Inc. to facilitate the production of its iPhone and iPod Video gadgets. The shortfall in supply of the LTPS cellphone panels the world over will give Toppoly a shot in the arm in prospective operations as the company currently concentrates on the high-price panels.
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| | ![]() | | | PChome Diversifies Into Internet IPTV Business
Taipei, Oct. 8, 2007 (CENS)--Portal site PChome Online will set foot in Internet Protocol TV (IPTV) business by putting money into IPTV site Joost, which is co- founded by Skype's founder Niklas Zennstrom, according to PChome Chairman H.C. Chan.
Taiwanese industry watchers pointed out that IPTV has recently lured heavyweights of several industries at home and overseas including HP, Microsoft, Chunghwa Telecom, Google and Yahoo to develop strong presences in the market.
Chan noted that YouTube and Joost are currently the two IPTV mainstreams and he chooses to place stakes on Joost. He added that connection volume is crucial to development of IPTV and PChome portal site is advantageous in providing IPTV service because of its large connection volume.
Joost provides online TV services to cable TV stations, studios and any subscriber with transmission technology similar to Skype and ads are its major earnings source.
Chan said after selling Skype to eBay Zennstrom had started a plan to test broadband TV service in preparation for snatching up a portion in the growingly rising broadband online media market.
Chan said Taiwan is a good experimental ground for Joost because the island tends to be receptive to novel things. For instance, Taiwan has become the most promising market for Skype-based IP phone service after his company introduced Skype into the island, having shown profitability.
PChome has spun off its IT-hardware business into an independent company specializing in designing Internet telephones.
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| | ![]() | | | HwaCom, ZyXEL Win Chunghwa's Lucrative VDSL2 Contract
Taipei, Oct. 8, 2007 (CENS)--HwaCom Systems Inc. and ZyXEL Communications Inc. recently jointly outbid their rivals to win a contract to supply Chunghwa Telecom Co., Ltd. with home gateways for VDSL2 systems by offering bidding price of NT$838.8 million (US$25 million at US$1:NT$33).
Taiwanese industry watchers said that the winning is tantamount to qualifying to bid in the future for Chunghwa's more lucrative contracts for the high-speed access VDSL2 products.
Chunghwa, currently Taiwan's No.1 telecom provider, plans to buy nearly NT$15 billion (US$454 million) worth of VDSL2 (Very High Data Digital Subscriber Line 2) equipment over the next five years after the recent procurement.
VDSL2 is the newest and most advanced standard of DSL broadband wireline communications designed to support the wide deployment of triple play services such as voice, video, data, high definition television (HDTV) and interactive gaming.
VDSL2 permits the transmission of asymmetric and symmetric aggregate data rates up to 200 Mbit per second on twisted pairs using a bandwidth up to 30MHz, compared with VDSL1's transmission rate of 30 to 70Mbit per second. Speedier transmission allows VDSL2 to carry massive video data and offer interactive service.
Chunghwa pointed out that the recent contract buys 340,000 lines of office-end and consumer-end VDSL2 equipment combined as well as ZyXEL and HwaCom underbid other rivals by offering bidding price lower than Chunghwa's envisioned NT$3,000 (US$90) a gateway.
ZyXEL and HwaCom are contracted to supply the gateways for WLAN, VoIP, IMS and NGN services.
Industry watchers pointed out that Chunghwa buys the high speed access equipment in preparation for its offering of high-quality movie-on-demand (MOD) channels and high-quality video-on-demand services.
So far, the Taiwan's No.1 telecom carrier has signed up 380,000 MOD subscribers and projected to increase the subscriber number to 500,000 by the end of this year, one million some time next year and 3.8 million after five years.
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| | ![]() | | | Yoshine to Locally Produce Safari Ultra-light Helicopters
Taipei, Oct. 8, 2007 (CENS)--Yoshine Helicopters Inc. of Taiwan recently demonstrated its first locally produced Safari trainer helicopter in partnership with Canadian Home Rotors Inc. (CHR)
Charles Lin, Yoshine chairman, claimed that the latest cooperation project is expected to one step push Taiwan forward to become a light helicopter operation center in Asia-Pacific.
In addition to winning the contract production order for Safari helicopter, Yoshine also became the Asia-Pacific general agent of such aircraft to be responsible for sales in Japan, South Korea, mainland China, Singapore, Indonesia, India, and Malaysia.
Established in 1998, Yoshine has been focusing on development and manufacturing of coaxial ultra-light helicopters. In 2003, the company set up a helicopter laboratory with helps from local Aerospace Industrial Development Corp. (AIDC) to develop coaxial ultra-light helicopters.
The Taiwan helicopter maker inaugurated its operation headquarter and plant in Central Taiwan Science Park (CTSP) in 2006 and currently focuses on marketing coaxial helicopters and transmission system parts.
With CHR's authorization, Lin said, Yoshine is expected to win orders for over 100 Safari helicopters in 2008. The Safari helicopter weights about 400 kgs and has a maximum flying speed of 160 km-per-hour (kph). The aircraft's application range is very wide, including training, aero-touring and -photographing, crop spraying etc.
Yoshine has completed all the assembly and test-flight works as well as demonstrated the Safari at its CTSP plant campus. Murray Sweet, president of CHT, personally flied the new helicopter.
Yoshine currently has two self-developed helicopter models, including the vertical Take-Off and Landing (VTOL) UAV model EzyUAV and EzyCopter coaxial personal helicopter.
Currently, Yoshine helicopter's engines are still supplied by a German company but most of the key parts used on the company's helicopters are supplied by local suppliers.
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| | ![]() | | | HAITEC Gets ITRI's Technical Transfer of UWB Sensing Technology
Taipei, Oct. 8, 2007 (CENS)--Hua-chuang Automobile Information Technical Center Co. Ltd. (HAITEC) under the Yulon Group recently signed two cooperation agreements with domestic Industrial Technology Research Institute (ITRI) to get technical transfer of the ultra-wide broadband (UWB) vehicle safety sensing technologies jointly developed between HAITEC and ITRI.
HAITEC said that the two parties would continue to conduct wider-range joint development projects in both vehicle active and passive safety systems, such as the drunk-sensing, head-up display (HUD) etc., as well as clean powertrain systems.
Statistics compile by Strategy Analysis showed that the compound annual growth of automotive electronics production value between 2004 and 2013 would reach 7.3%, much higher that 3.8% of the automotive engines. Among all automotive electronics product categories, the safety-related systems are expected to enjoy the highest compound growth rate of 12.1%. So, all major global automakers and tier-one parts supplier have been actively devoting into developing newer and better electronic safety equipment for vehicles.
Liu I-chen, president of HAITEC and chairman of Advance Power Investment Co., Ltd. (CECTEK, formerly China Engine Corp.), pointed out that his company has been actively developing automotive electronics systems and hopes to cultivate both complete-vehicle and key-system R&D capacities through the helps from ITRI and the entire local automotive industry.
Liu stressed that the automotive electronics are expected to account for about 40%, or equal to about US$192 billion, of the production value of the overall auto-parts market in 2010. In 2020, he added, about 40% of the 90 million new cars would be produced in Asia, generating huge and lucrative business opportunities for automotive electronics suppliers.
HAITEC would continue to focus on several target products for next stage, including the "drunk sensor" and an active driving safety system that could provide 360-degree info to drivers.
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| | ![]() | | | Taiwan's Syndicated Loans Down 15.7% to US$15.6 B. in First 9 Months
Taipei, Oct. 8, 2007 (CENS)--Taiwan recorded aggregate syndicated loans of US$15.645 billion in the first nine months of this year, down by 15.7% from the corresponding figure of last year, according to statistics compiled by Blooming, a world's leading financial information provider.
In the same period the number of cases posted an annual drop of 28 or 20%. Bank of Taiwan (BOT) was the largest provider in Taiwan's syndicated loan market with underwriting syndicated loans of US$1.637 billion in the first nine months, taking a market share of 10.5%, although the bank ranked No. 5 last year.
In terms of the number of syndicated loan cases, Mega International Commercial Bank handled 35 cases to take first place, with total loans of US$1.431 billion, the second highest among the providers.
However, Citibank, the largest foreign bank in Taiwan and formerly the major lender in Taiwan's syndicated loan market, was squeezed out of the top-20 list.
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| | ![]() | | | Govt.-linked Banks to Offer Loans to Foreign Private Equity Firms for Bank Merge
Taipei, Oct. 8, 2007 (CENS)--To comply with the government's second financial reform, Taiwan's leading government-linked banks including Mega International Commercial Bank, Taiwan Cooperative Bank, and Land Bank of Taiwan have shown great interest in funneling capital into private funds operated by foreign private equity firms for merging domestic financial institutions.
Carlyle Group, a globally leading private equity firm, has recently applied for syndicated loans for merging Ta Chong Bank, a private domestic bank in Taiwan. Carlyle is reportedly to purchase the bank at NT$17 (US$0.52) per share.
The projected syndicated loans for the firm are reportedly to be reduced to NT$12.3 billion (US$372.73 million at US$1 = NT$33) from the original projection of NT$17 billion (US$515.15 million) and the interest rate of the loans will remain unchanged at a high level of above 4.2% per annum.
Longreach Group, another leading international private equity firm, is planning to purchase stakes in EnTie Commercial Bank, but has yet to make a final decision. It is reported that Longreach may purchase the bank's stakes at NT$9-9.5 (US$0.27-0.29) per share. Currently the market value of EnTie stock is about NT$8.6 (US$0.26) per share.
Many domestic banks are quite interested in joining the pool of providers of the two syndicated loans mentioned above, with Mega, Taiwan Cooperative, and Land Bank likely to be lead banks of the loans.
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| | ![]() | | | ASUS Wins Seats in Ability's Board of Directors
Taipei, Oct., 8, 2007 (CENS)--ASUSTEK Computer Inc. won six director seats and one supervisor seat in the board of Ability Enterprise Co., Ltd., a large-sized supplier of digital cameras during a provisional shareholders' meeting of the latter.
After the meeting, Tung Chiung-hsi, president of Abico Group, stayed as chairman of Ability, and is expected to keep taking advantage of his close ties with Japanese clients to help ASUSTeK penetrate the Japanese market.
As the biggest shareholder in Ability, Abico yielded a 13% stake in Ability to ASUSTeK at the interim shareholders' meeting, allowing ASUSTeK to gain seven seats in Ability's boards of directors and supervisors.
In fact, such a development is good for both Ability and ASUSTeK, because the former can enjoy more orders from the latter for digital cameras sold under the brand ASUS, and diversify its product lines in the future, while the latter can upgrade its competitiveness in the field of digital cameras and penetrate the Japanese market more smoothly.
Ability posted record sales revenue of NT$3.66 billion in September, with shipment of more than 1.3 million digital cameras, according to Roger Tseng, president of the company.
However, Ability would have been able to post better September revenue but for shortage of display panel supply and labor. Tseng said that as the shortage may be eased in October, Ability's monthly shipment is expected to exceed 1.5 million units in the following months.
Tseng opined that Ability can attain an annual shipment goal of 12 million digital cameras for this year, with 5.4 million posted in the first half and 6.6 million in the second half. The company's single-quarter shipment and sales revenue are also expected to hit a new high of about 3.5 million units and NT$10 billion, respectively, in the fourth quarter of the year.
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| | ![]() | | | Texas Instruments's DLP Chip Adopted by 3 Clients
Taipei, Oct. 8, 2007 (CENS)--The U.S.-based Texas Instruments Inc. (TI) announced that its latest digital light processor (DLP) chip has been adopted by three clients, namely Foxconn Technology Group, Young Optics Inc. and Sypro Optics, which all plan to incorporate the chips into their mobile projectors for sales abroad, according to company sources.
TI noted that its mini DLP projector is compacter and lighter than competing models, and can be easily integrated with such handy consumer electronics as mobile phones, digital cameras and mobile multimedia players.
Accordingly, Foxconn, Young Optics and Sypro Optics have all decided to step into the field by jointly developing DLP-based mini projectors, including built-in models, with suppliers in the sector.
TI unveiled its newest mini projectors at an exhibition held by Society For Information Display (SID) in U.S.'s San Diego. The products, including general models or built-in models, can show large-sized images and photos in different ways for consumers or business people.
TI said that boasting high-definition images, its DLP chips feature non-speckle solutions and can be incorporated in mini projectors, allowing users to project images on paper sizing 8.5 inches X 11 inches anywhere and anytime.
Foxconn noted that from the viewpoint of mobile phone designers, DLP-based mini projectors can help Foxconn to differentiate its products from other competing models in the market.
Young Optics is also optimistic about business potential in the market for projecting technologies and mobile projectors, saying that DLP technology enables it to develop quality mobile projectors in the global market.
DLP mini projectors were debuted at CTIA-Wireless 2007 in March 2007, and its second editions were showcased at the exhibition held by SID, boasting compactness and high definition.
At present, there are about 1.4 billion units of 3.5-inch and below mobile display devices in the global market, and DLP technology, which can be built in those devices directly, enables those users to project information and movie clips on their mobile devices on larger screens.
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| | ![]() | | | Government Moves to Boost Taiwan's Lagging Exhibition and Convention Industry
The Taiwan government recently announced the launching of an NT$585 million (US$17.7 million at NT$33:US$1) program aimed at revitalizing the island's economy by bolstering its exhibition and convention industry.
As part of this effort, the government also plans to appropriate NT$22.2 billion (US$672.7 million) for the construction of new exhibition centers in Taichung, Tainan, and other locations around the island. The Taichung exhibition center, which will occupy an area of 64,625 square meters, will be built in three stages; the Tainan center, which will cover only 3,489 square meters and have room for just 200 booths, is scheduled for completion by the end of next year.
Premier Chang Chun-hsiung believes that the exhibition and convention industry should play the role of a locomotive that pulls other industries along with it, including trade, finance, transportation, and tourism. In theory, every dollar that is invested in the exhibition and convention industry will create economic synergies worth eight to 10 times that much, giving a huge boost to the economy and the job market.
The premier predicts that the exhibition industry will bring 22,000 buyers and 800,000 other visitors to Taiwan over the next year and a half, generating consumption in the amount of US$1.6 billion and creating business opportunities worth NT$4 billion (US$121.21 million).
Economics Minister Steve R.L. Chen reports that the government will soon map out 12 measures to help boost the exhibition and convention industry. These will include the integration of two related shows and the extension of their exhibition periods, the reduction or elimination of entrance fees, and the readjustment of exhibition dates to coordinate with similar or related shows being held in Hong Kong, China, or other neighboring countries.
Insiders note that the Taipei World Trade Center (TWTC) and the Taipei International Convention Center (TICC), both operated by the government-backed Taiwan External Trade Development Council (TAITRA), have suffered declining revenues in recent years. From a peak of NT$1.8 billion (US$54.54 million), their combined annual income has dropped more than 10% to NT$1.6 billion (US$48.48 million) today. However, some of the local exhibits, such as those for bicycles, machinery, and computers, are still growing.
Increasing competitive pressure is coming from neighboring areas, particularly such ethnic Chinese places as China (of course), Hong Kong, and Macao. China is aggressively developing its exhibition industry and building large halls in numerous major cities; Hong Kong is planning to add a third world-class exhibition center; and Macao is building an exhibition center three times the size of the TWTC Exhibition Hall.
Room for Improvement
Last year Taiwan ranked seventh in Asia as a venue for international exhibitions, trailing China, Japan, Hong Kong, South Korea, India, and Australia, according to statistics compiled by the Union des Foires Internationales (UFI, or the Global Association of the Exhibition Industry). In the same year, according to statistics released by the International Congress & Convention Association (ICCA), Taiwan was 36th in the world in the number of international conventions hosted.
Taiwan's main venue for international shows, the TWTC Exhibition Hall, has an exhibition area of 41,313 square meters, providing room for about 2,254 standard booths. Each of the larger Asian destinations mentioned above can offer an exhibition space of 80,000-100,000 square meters and room for 4,400-5,500 booths. This makes it difficult for Taiwan to compete for the largest international exhibitions.
The government is addressing this problem by building the NT$13.2 billion (US$400 million) Taipei Nangang Exhibition Center, which will be completed early next year and hold its first exhibition next March.
TAITRA president Chao Yuen-chuan reports that last year, the TICC hosted a total of 800 meetings, of which 21 were international conventions that brought in 25.38% (NT$52 million or US$1.58 million) of the center's total revenue for the year. He believes that there is a lot of room for the island's international convention business to grow.
Among the major international events that will be held at TICC next year are the annual convention of a global semiconductor association, the second Asian MICE (meetings, incentives, conventions, and exhibitions) leaders' forum , some APEC meetings, and the World Congress of Skal International, an association of top-level travel and tourism professionals.
Chao suggests that Taiwan should strive to attract more international conventions to go with its popular trade shows such as those for medicine and medical equipment, food, and tourism.
The TAITRA president also encourages Taiwanese trade bodies to organize exhibitions in China and other Asian countries. He notes, for instance, that TAITRA organized an electronic show in Thailand and an industrial show in India, both highly successful, last year.
Now is the time, president Chao emphasizes, for Taiwan to work hard on promoting its exhibitions and conventions industry as a means of stimulating the island's other industries, while at the same time cooperating with Chinese organizations in the joint organization of exhibitions on the other side of the Taiwan Straits so as to tap the vast market there. (JL, September 2007) | |
| | ![]() | | | TECO, Kolin Join Forces With Syntax-Brillian to Promote LCD TVs
The TECO Electric and Machinery Co. and Kolin Inc., two of Taiwan's leading manufacturers of electrical appliances and consumer electronic products, recently announced that they would join forces with the U.S.-based Syntax-Brillian Corp. to promote branded liquid crystal display (LCD) TVs in the North American market.
TECO spent US$20 million to buy a 3.26% stake in Syntax-Brillian as a means of gaining entry into Syntax-Brillian's supply chain (of which Kolin is already a link) for Olevia- and Vivitar-brand LCD TVs. TECO and Kolin are also considering cooperation in other product areas.
While TECO is making money on its heavy electrical equipment division, it is in the red on its LCD TVs and other household electronics due mainly to fierce competition in the market.
Kolin has seen its shipments of LCD TVs grow rapidly ever since it began working with Syntax-Brillian to promote the Olevia brand, owned by the latter, in the North American market four years ago, and its sales to that market in the first half of this year amounted to 600,000 units. According to iSuppli, a market research company, Olevia has become the seventh-largest LCD TV brand in North America with a 6.4% share of the market in the second quarter of 2007.
Formation of Three-Party Alliance
When TECO contacted Syntax-Brillian about a cooperative arrangement, the American company assented on condition that Kolin continue being in charge of production for Olevia and Vivitar LCD TVs, and that Kolin's assent be obtained.
After TECO accepted these conditions, it joined forces with Syntax-Brillian and Kolin in a three-party alliance with Kolin owning 7% of Syntax-Brillian in addition to TECO's 3.26%.
James Li, president of Syntax-Brillian, said that with the entry of TECO into the alliance, his company will place orders with both Kolin and TECO for different LCD TVs according to market area and product size. He hopes that by working together, the three companies will be better able to compete with such leading brands as Sharp and Sony in the world market.
Li added the alliance will explore markets for Olevia and Vivitar LCD TVs not only in North America but also in Latin America, mainland China, and Vietnam.
TECO chairman Liu Chao-kai is delighted to see the formation of the alliance, noting that it allows the three parties to support each other, with TECO and Kolin providing financial and production resources while Syntax-Brillian focuses on brand promotion. TECO expects that this business mode will provide the strength of an integrated supply chain that stretches from R & D to customer service and procurement, helping to maintain competitiveness in saturated markets such as Taiwan.
Kolin's Bet on Stronger Competitiveness
According to insiders, Kolin allowed TECO to join it with Syntax-Brillian partly because TECO agreed to let Kolin keep control of the alliance's manufacturing resources, and partly because Kolin needs TEOC's household electronics division to bolster its competitive position in the cutthroat Taiwanese market.
It seems that Kolin's objections to TECO's participation, which led it to reject the latter's first approach earlier this year, have been overcome. TECO's agreement to pay US$20 million for its stake in Syntax- Brillian (without asking for a seat on the board) also helped change Kolin's mind. Kolin does have a board seat.
Kolin and TECO have already been working together, in a way, by carrying out technology exchange with the same Japanese company, Mitsubishi. This relationship will help the two parties integrate their manufacturing resources, and also bring up the possibility of the two combining their separate household electronics operations into one. If that happens they will become the top two household electronics manufacturing firms in Taiwan, outpacing Sony, Sharp, and Panasonic. (SC, Sept. 2007) | |
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