| Prime News | | ![]() | ![]() | Mega Deal Fueling Commercial-Property Market
Taipei, Oct. 18, 2007 (CENS)--Taiwan Life Insurance won the opening bidding for the headquarters building of Kuo Hua Life Insurance at the Zhongshan N. Road of Taipei city with a tender of NT$5.3 billion, the highest among domestic commercial-property deals so far this year, further fueling the commercial-property market.
Taiwan Life Insurance outbid Shin Kong Life Insurance and Farglory Life Insurance in the contest for building, a landmark in the Zhongshan N. Road area, boasting unique Baroque construction style.
The building has 10 stories above ground and three basement levels, built on a plot of 900 pings (one ping equals 36 square feet), with floor space totaling 6,664 pings. The deal, therefore, is translated to NT$6 million per ping for the land, a record high in the region, or NT$800,000 per ping for the floor space.
Chu Ping-yu, chairman of Taiwan Life Insurance, reported that the building will be used as his company's new headquarters, so as to accommodate its expanding business. Meanwhile, the deal will be a shot in the arm for Kuo Hua Life Insurance, now in dire financial strait.
The deal will further fuel the booming commercial-property market, whose trading volume already topped NT$60 billion in the first three quarters this year, triple the average annual volume in the past several years.
More mega deals appear to be in the offing. CLSA Securities is reportedly looking for buyer for Asia Plaza, an A-class office building in the Neihu Science-based Industrial Park in Taipei City, which it purchased at NT$7 billion last year. One potential buyer is Citiproperty Private Equity.
CLSA is reportedly asking NT$8.5 billion for property, translating to 15% of annual investment returns.
Industry insiders, though, warn that the domestic commercial-property market may be approaching the climax, as office rentals have lagged far behind commercial-property price hikes. Honda Appraisers Joint Firm pointed out that gross investment returns for office buildings in Taipei City reached only 4.77% in 2006, down 12.5% from 5.45% four years ago, while after deducting overheads and transitional vacancy, net investment returns amounted to 3.66%, down 10% from 2003's 4.07%.
((PL)) (GE) | |
| | ![]() | | | Gov't Forbids China's Sovereignty Fund From Investing in Taiwan
Taipei, Oct. 18, 2007 (CENS)--In line with the existing ban on Chinese mainlanders to invest in Taiwanese companies, the government will not allow the newly established China Investment Co., a sovereignty fund manager boasting gigantic capital of US$200 billion, to invest in the Taiwanese stock market, said Chen Min-tung, chairman of the Cabinet-level Mainland Affairs Council yesterday (Oct. 17).
When answering a question from the floor, Chen noted that as a sovereignty fund, China Investment has a special political mission, which, along with its opaque investment process, will induce alarm among various countries. "This (investing in the Taiwanese market) is a method of propaganda, with a specific political purpose," stressed Chen.
The remark was apparently made in response to statement by Lou Ji-wei, chairman of China Investment Co., on Oct. 16, saying the new company will utilize its financial clout to invest in all non-renmibi markets, including Hong and Taiwan.
Formally established on September 29, China Investment's enormous capital came from issuance of special national bonds for subscription by financial institutions before using the raised funds to purchase forex from People's Bank. Even during its preparation period, the company already invested US$3 billion buying into the noted U.S. private equity fund Blackstone.
((PL)) (GE) | |
| | ![]() | | | FPG to Invest NT$706.8 B. in Taiwan in Five Years
Taipei, Oct. 18, 2007 (CENS)--Formosa Plastics Group (FPG) recently expressed its willingness to invest NT$706.8 billion (US$21.74 billion at US$1:NT$32.5) in Taiwan in the coming five years.
FPG made the resolution in a recently held seminar sponsored by the Industrial Development Bureau under the Ministry of Economic Affairs. Over the past few months, financial and economics units observed the instruction of the Executive Yuan, the Cabinet, by looking into the investment moves of domestic large-sized firms, including FPG. It is expected that Hon Hai Precision Industry Co. will be the next firm
At present, the investment projects launched by FPG are worth of NT$200 billion (US$6.15 billion). Accordingly, the group will set aside more than NT$500 billion (US$15.38 billion) to invest in Taiwan in the coming five years.
In addition to the domestic investments, the FPG will concurrently invest NT$76 billion overseas. FPG noted it would give priority to investing in Taiwan.
FPG stressed it would invest NT$1.96 trillion (US$60.3 billion) in the period of between 1991 and 2011, including NT$1.805 trillion (US$55.53 billion) for domestic investments and the remaining NT$155.3 billion (US$4.77 billion) for overseas investments.
At present, FPG's already-set investment projects include the NT$10 billion (US$307.69 million) crystalline-growing plant for 12-inch wafers by its subsidiary--Formosa Sumco Technology Corp.; the NT$137.3 billion (US$4.22 billion) Formosa Steel Corp., and the NT$10 billion (US$307.69 million) joint-venture poly-silicon plant with Norway-based REC Co. The group has also worked out a plan to launch fifth-stage expansion project for its naphtha-cracking complex in Yunlin County of central Taiwan.
In respect of overseas investments, the FPG will invest a total of NT$76 billion (US$2.33 billion) in mainland China, the U.S., the Philippines, and Vietnam in the coming five years.
It is said the FPG has submitted an US$100 million investment project with the Investment Commission under the Ministry of Economic Affairs for setting up a stainless-steel plant in mainland China, which is required to pass the screening of a cross-ministerial committee.
According to its internal financial statement, FPG has cumulatively invested US$4.3 billion in the mainland as of the end of the third quarter of this year, accounting for 25.45% of regulatory cap.
((BS)) (G) | |
| | ![]() | | | Cement Firms See Bountiful Returns in Mainland China
Taipei, Oct. 18, 2007 (CENS)--Thanks to the surge in cement prices, Taiwan's leading cement producers, including Taiwan Cement Corp., Asia Cement Corp., Chia Hsin Cement Corp., Universal Cement Corp. and Goldsun Development & Construction Corp., have all been reaping considerable returns in mainland China since the beginning of this year.
An institutional investor predicted Asia Cement will score more than 200 million renminbi in earnings in the mainland this year as the company meets little competitiveness in its investment location in central China region. Despite its latter investments in the mainland, Goldsun is expected to see earnings reach 50 million renminbi this year.
Asia Cement's investments in the mainland concentrate on central and western China regions. At present, the company's cement plant in Jiangxi province is the largest of its kind in that area. Each of its Wuhan and Chendu plants is one of the top-two cement plants in respective region. The company predicted it will meet a goal of producing 20 million metric tons of cement in the mainland in 2012, compared to present capacity of eight million metric tons.
A market analyst said Asia Cement's quarter earnings in the second half of this year will exceed that of the first half which came to over 70 million renminbi. It is expected the company will see earnings break the 200 million renminbi in the mainland this year.
Taiwan Cement scored 60 million renminbi in the first half of this year as its Yingde plant in Guangdong province has turned to profits since the first quarter of this year. To ride the wave of cement price surge, the Yingde plant is now running in full capacity. It is expected Taiwan Cement will be able to see earnings reach 150 million renminbi in the mainland this year, smaller than earlier estimated because of its merge with Chia Hsin's subsidiary in Hong Kong.
Chia Hsin noted each of its Jingyang and Union cement plants in the mainland posted 20 million renminbi in earnings in the first half of this year. An institutional investor estimated the two plants will register 150 million renminbi in earnings this year if the cement price reaches between 260 and 280 renminbi per metric ton.
Goldsun said it began making profits from investments in Fujian province in April this year. At present, the quoting price for cement in Xiamen of Fujian province has reached 360 renminbi per metric ton and another 5% rise is expected in the foreseeable future. Thanks to the price surge in cement, Goldsun will be able to score 50 million renminbi in earnings in the mainland this year.
Universal's Huizhou plant in Guangdong province will reach between 1.8 million and two million metric tons this year. The company earlier predicted it would be able to see breakeven for its Huizhou plant this year. Thanks to the surge in cement prices, the Huizhou plant has begun making profits since September and will be able to post five million renminbi in earnings this year.
((BS)) (G) | |
| | ![]() | | | ASE Adjusts Global Strategy to Hike Profit
Taipei, Oct. 18, 2007 (CENS)--Aware of earnings slowdown caused by inefficient global operation, Advanced Semiconductor Engineering (ASE) Inc., currently the world's No.1 chip assembler, decided to restructure and optimize its global strategy.
Although ASE passed Amkor Technology in 2004 as the world's No.1 chip packaging and testing house, its earnings have been lackluster and even lower than that of Amkor and Siliconware Precision Industries Co., Ltd., respectively.
Some institutional investors have forecast ASE's revenue for this year to increase a marginal 5% from last year and the company to have hard time achieving gross margin goal of 30% throughout this year. They even estimated the company's earnings for this year would likely slightly contract from last year.
The modest earnings and revenue growth rates have dragged down its share prices although its revenue has crossed NT$100 billion (US$3 billion at US$1:NT$33).
Addressing these problems, ASE recently unveiled a workout strategy. After fully acquiring U.S. affiliate ASE Test Ltd., the company is moving to beef up its mainland Chinese affiliates' manufacturing capability.
The company plans to boost output capacity at its IC-substrate factory in Shanghai and Kunshang of mainland China. Beyond that, the company will increase the number of wire-bonding machines at Shanghai affiliate Global Advanced Packaging Technology Ltd. to 1,200 systems from current 800 systems at yearend.
After completing these expansions, mainland facilities will become ASE's pivotal bases for supplying conventional wire-bonding packaging service and consumer IC packaging and testing service as well as IC substrates, which it hopes will help win back orders from Amkor and Siliconware. Its factories in Taiwan will focus on high-end productions like flip-chip packaging for graphics chips and handset chips as well as packaging and testing for memory chips.
Some institutional investors estimate the expansions will likely double Global Advanced's annual revenue to US$400 million next year as well as boost ASE's annual revenue by over 15% and its annual earnings by at least 25% next year. At the rates, the company's earnings will likely top NT$20 billion (US$606 million).
They noted that since ASE acquired Taiwan government's permission to invest in the mainland late last year, the company has made using the mainland's low production costs a major strategy to boost its earnings and gross margin over next years.
Some industry watchers pointed out that it is not too late for ASE to open facilities in the mainland although many of its competitors have set up operations there in light of of the reality that heavyweight fabless houses, including Broadcom, Marvell, and Zoran, have just begun to increase placing orders for testing and packaging in the mainland.
((KL)) (E)
| |
| | ![]() | | | WiMAX Market to Take Off in 2009: D-Link's Liao
Taipei, Oct. 18, 2007 (CENS)--D-Link Systems Inc. President Z.C. Liao forecast global market for WiMAX-based (Wireless Interoperability Microwave Access) telecommunications will begin taking off in 2009 along with equipment for trial service bids to contractors.
D-Link is currently the world's No.1 supplier of networking equipment for individuals and SOHO (small office/home office) workers. Liao made the statement in Taipei on the eve of a WiMAX forum, which will begin on Oct. 22.
Like most of Taiwanese networking-telecommunications equipment suppliers, D-Link has chosen to support WiMAX over other technologies as dominant fourth-generation wireless technology. WiMAX is available for end users and poses huge business opportunities for suppliers of office-end equipment.
To shoot for the lucrative business opportunities, D-Link will introduce universal mobile service and universal portable number service in first stage of its WiMAX operation and afterward institute product-application management platform.
D-Link's executives pointed out that their company is setting sight on WiMAX802.16e connection technology and will introduce applications based on the technology next year despite the maturity of 802.16d. D-Link has planned WiMAX as its next centerpiece technology after 802.11n. In terms of transmission speed, 802.16e is around twice as faster as 802.11n and five times faster than 3.5G technology.
Liao pointed out that in the past networking-equipment suppliers mostly centered on routers. As WiMAX is estimated to bring about a wider range of end applications than do current networking technologies, his company will introduce WiMAX radios and WiMAX household healthcare equipment.
D-Link's WiMAX products include end-user products like PCMCIA cards and WiMAX/WiFi routers as well as premise-end equipment such as base stations.
Executives of Chunghwa Telecom Co., Ltd., currently Taiwan's No.1 telecom carrier, pointed out that WiMAX is more suitable for emerging markets and markets well equipped with networking infrastructure than for markets well paved with cables. Thus, the carrier will not use WiMAX to snatch up broadband wireless market since it is already the island's No.1 ADSL-service provider.
It is the second year for Taiwan to hold the WiMAX forum. Around 600 to 700 specialists from the world will attend the meeting. Heavyweight panelists include WiMAX Forum Chairman and President Ron Resnick; John Hoadley, vice president of 4G Business and Ecosystem Development, Nortel; Patrick Plas, chief operating officer of Wireless/WiMAX Alcatel Lucent; Marko Tiesmaki, head of Business Development, Broadband Wireless Business, Nokia Siemens; K. Jay Miyahara, NEC's Chief Engineer; Tecom Corp. Chairman J.K. Liu; and ZyXEL Communications Vice President J.K. Liang.
((KL)) (E)
| |
| | ![]() | | | AUO Ranks as World's No. 6 Small/Medium Display Supplier in Q2
Taipei, Oct. 18, 2007 (CENS)--The second-quarter global revenues generated by small/medium displays was US$4.7 billion, down 1% from previous quarter and 9% from a year earlier, according to the Q3 2007 quarterly small/medium display shipment and forecast report released by DisplaySearch, the worldwide leader in display market research and consulting.
AU Optronics Corp. (AUO), already the largest manufacturer of large-sized thin film transistor-liquid crystal display (TFT-LCD) panels in Taiwan, ranked the world's No. 6 small/medium display supplier in the second quarter with a 5.4% global share, making it also the largest small/medium display maker on the island.
The shipment of small/medium displays reached 542.6 million in the second-quarter, up 15% from a year earlier but down 2% from previous quarter.
According to DisplaySearch, the second quarter looks to be an inflection point in the small/medium display market as revenues have reached bottom and are expected to increase over the next two quarters. Dale Maunu, vice president of DisplaySearch, said that the average selling prices (ASPs) are mostly flat or even increasing due to the tightening of supply as shipments to applications such as digital cameras, personal digital assistants (PDAs), and automobile monitors are seeing double-digit growth."
DisplaySearch forecasted the third-quarter shipment of small/medium displays to increase to 611.6 million units, up 13% from previous quarter and 20% from the same period of last year; while revenues to climb by 17% and 1%, respectively, to US$5.5 billion.
The company also said that in terms of display technology, Samsung SDI led in color super twisted nematic (CSTN), Epson Imaging led in amorphous silicon (a-Si), and Sharp remained the leader in polysilicon (p-Si).
The a-Si TFT-LCDs led with 165.3 million units shipped for a 30.5% share in the second quarter, followed by low temperature polysilicon (LTPS) TFT-LCDs with 107.7 million units shipped for a 19.9% share, DisplaySearch data showed.
Looking at this quarter's results, DisplaySearch analyzed, it is evident that the industry is moving toward a period of tighter supply, and price reductions from panel manufacturers are becoming less common. More importantly, display manufacturers are allocating capacity to growing more profitable sectors such a digital picture frames.
The cellphone panel continued to be the leading small/medium display application sector with a 50.7% share of shipments (275.1 million units) in the second quarter. Other applications such a digital picture frames, PDAs, portable navigation devices (PNDs), and multi-function printers experienced significant gains in last quarter.
DisplaySearch's findings also showed that panel makers are starting to take a closer look at their revenue per square meter of glass and are raising their prices on the bottom end or shifting to higher productivity applications such as cellphones. In addition, large-sized panel makers that have been producing and selling cells are considering expansion of their module capacity to increase revenue and move to upper stream of the supply chain.
| |
| | ![]() | | | CMO's Second Chinese LCM Facility Kicks Off Mass Production
Taipei, Oct. 18, 2007 (CENS)--Chi Mei Optoelectronics Corp. (CMO), the second-largest manufacturer of thin film transistor-liquid crystal display (TFT-LCD) panels in Taiwan, recently announced having begun mass production at its second overseas LCD module (LCM) production base, the Nanhai Chi Mei Optoelectronics Corp. in Foshan, Guangdong Province of mainland China.
CMO claimed that the monthly LCM production capacity at Nanhai CMO is expected to break 200,000 panel modules and the annual shipment volume in 2008 is expected to outstrip 10 million units.
The new Chinese LCM subsidiary would be a strong supporting force to CMO's global business deployment. Unlike most counterparts in Taiwan, who set up their LCM plants in mainland China for mainly exports, Nanhai CMO eyes mainly at the huge and booming Chinese LCD TV market.
CMO already runs a LCM production plant in Ningbo, Jiangsu Province of China. Currently, the Ningbo facility owns a monthly capacity of about three million LCMs, most of which are for exports.
Nanhai CMO chairman Jack Lin pointed out that CMO is very optimistic about the LCD TV market in China. The company decided to locate the new LCM plant in Foshan after a consideration that about half of the LCD TVs produced in China are from manufacturers' assembly plants in Guangdong Province. Currently, he said, the employee number of Nanhai CMO is about 1,600 people and the figure is expected to increase to 6,000 in mid-2008.
"CMO will continue to increase front-end capacity this and next year", said Frank Liao, chairman of CMO. "The addition of Nanhai CMO to our back-end module operations has come just in time to provide solid support for the augmentation of front-end capacity, thereby satisfying the growing demands of our global customers", said Liao.
CMO is the fourth largest supplier of TFT-LCD panels in the world. The company is now eyeing the upcoming Beijing Olympics in 2008 and the World Expo 2010 in Shanghai, which are expected create a wave of new business opportunities in the TV broadcasting of sports and related events and greatly stimulate LCD TV sales in China.
Thanks to the advantages CMO now enjoys in the industry plus the timely startup of Nanhai CMO, the company said, CMO expects to remain in its position as the leading LCD TV panel supplier in China throughout 2008.
((QL)) (E) | |
| | ![]() | | | TAITRA's Second Exhibition Center to Open in March 2008
Taipei, Oct. 18, 2007 (CENS)--The Taipei Nangang Exhibition Center (TNEC), located in northern Taipei, is slated to open in March of 2008 and will, like the existing Taipei World Trade Center (TWTC), be operated by the Taiwan External Trade Development Council (TAITRA), the government-backed trade promoter.
TNEC covers an area of 60,000 square meters, with seven stories above ground and two below. The total exhibition space of 144,000 square meters is able to accommodate about 2,666 standard booths, if plus 2,254 standard booths available in TWTC, which has been around for about two decades, Taiwan will then boast near 5,000 standard booths for international shows.
Other than being a trade show venue, the new hall features a column-free fourth floor, which occupies 23,000 square meters, that is able to house 30,000 seats for large-sized shows or activities.
Huang Chih-peng, director general of the Bureau of Foreign Trade (BOFT), indicated that the occupation rate of the new exhibition center is expected to reach 12.9% next year after it is officially running and the corresponding percentage is estimated to grow by 10 percentage points every two years in the future.
TAITRA disclosed that some six hot shows need spacious exhibition sites would be moved to the new center next year from TWTC, the existing major venue for Taiwan's international shows, and the popular Taipei International Cycle Show would be the first one to take place at the center next March.
((JL)) (GE) | |
| | ![]() | | | COA Offers NT$140M to Central Taiwan Tea Growers to Offset Damage by Imports
Taipei, Oct. 18, 2007 (CENS)--The Council of Agriculture (COA) recently announced to subsidize tea growers in central Taiwan NT$140 million (US$4.24 million at US$1 = NT$33) for losses caused by imported tea from Vietnam and China. This is the first agricultural subsidy offered by COA for import damage and also the largest of its kind since Taiwan entered WTO in 2001.
COA officials indicated that Taiwan's imported tea come mainly from Vietnam, Thailand and Indonesia, and some grown by Taiwanese in the said areas, particularly Vietnam. In 2005 Taiwan imported a total of 1,444 metric tons of tea and a year later the volume jumped by 60% to 2,330 metric tons. They believed that part of the imported tea was grown in China and exported to Taiwan via Vietnam.
Since the entry into WTO, Taiwan has allowed the imports of almost any kinds of agricultural produce from around the world, yet 37% of the produce growing in China is still prohibited from importing into the island and tea is one of the prohibited. Nevertheless, shrewd businessmen reportedly export tea grew in China to Taiwan via Vietnam. And such low-price imported tea has seriously impacted Taiwan's tea industry.
For instance, the spring tea grew this year in central Taiwan's four major tea zones, namely, Mingchien, Nantou, Lukoo, and Chushan, witnessed a sharp fall in prices. COA estimated that the damage in the four places, with a total tea-growing area of 3,000 hectares, should be compensated with NT$140 million (US$4.24 million) for their losses caused by imported tea. The measures on the losses of domestic tea are based on the production volume, import volume, output prices, processing cost, and inventories.
If the damage index reaches 10%, it is rated as "obvious loss," and "severe loss" if the percentage reaches 20%. The damage indices of the above-mentioned four tea areas ranged from 15% to 27%.
((JL)) (G) | |
| | ![]() | | | Corning to Launch New Mobile Projector Modules in 2008
Taipei, Oct. 18, 2007 (CENS)--Eyeing favorably the promising market for mobile projectors, the U.S.-based Corning Inc., world's leading supplier of glass for displays, plans to launch mobile projector modules to install in mobile phones in 2008, according to John LaSala, the company's director of display technologies unit.
To explore business opportunity in the market for mobile phones incorporating mobile projectors in the future, Corning has worked out a new mobile projector module, which enables users to use their handsets to watch mobile TVs, project photos, and play interactive games, making handsets multi-functional. If handsets makers also move to develop related devices, such functions are expected to become prevailing among general consumers.
Besides, Corning has ventured into development of chip-on-glass technology, by which Corning can directly flip chips on glass substrates, so as allows its clients of low temperature poly-silicon (PLTS) to skip the production process, and helps them to quickly meet requirements for updated products and technologies in the market.
Corning commands the largest share in the global market for glass substrates, and is happy to see displays widely applied in different fields. The firm noted that it can assure its clients of display panels of stable supply of glass substrates, when they have worked hard developing large-sized models for liquid crystal display (LCD) TVs and eagerly built 8-, 10- or 12-generation plants. But, the firm has to further evaluate costs on transport, package and production of large-sized glass substrates.
With its display technology laboratory officially operational, Corning debuted quite a few innovative technologies still in developing process. Corning scored sales revenue of US$5.7 billion for 2006, with 41% from its display technologies unit, and poured US$520 million in R&D.
((SC)) (E) | |
| | ![]() | | | Central Taiwan Science Park Leads in Sales Growth This Year
Taipei, Oct. 18, 2007 (CENS)--Central Taiwan Science Park (CTSP) has posted the strongest growth rate of 54.7% in sales among Taiwan's three science parks over the first eight months of this year, according to a report issued by Directory-General of Budget, Accounting and Statistics (DGBAS) under Taiwan's Executive Yuan.
Over the past eight months of this year, the three science parks, namely CTSP, Hsinchu Science Park (HSP) and Southern Taiwan Science Park (STSP), have generated sales of more than NT$1.2 trillion, for a growth of 11.6% in sales on average.
Among the three parks, HSP contributed the largest portion of 60.2% to the total sales, while CTSP posted the strongest growth rate of 54.7%, followed by STSP with 16.9% and HSP with the lowest of 3.4%.
Meanwhile, there were a total of 607 companies located in the three parks as of the end of this August, increasing by 20 from a year earlier. Of them, 409 are stationed at HSP, 109 at STSP and 89 at CTSP. During the first eight months, the number of optoelectronics suppliers has increased most sharply by 23% and integrated circuit suppliers by 6.7%, while those of both communication devices and PC parts makers have declined.
On the other hand, DGBAS indicated that there are a total of 186,000 workers in the three parks, increasing by 15,000 from a year earlier, with 120,000 at HSP, 51,000 at STSP and 15,000 at CTSP.
((SC)) (GE)
| |
| | ![]() | | | Over Four of 10 SMEs in Taiwan Go Under Within 5 Years
The make-up of the business sector in Taiwan has in recent years evolved into an "M-type" model, showing obvious growth in the number of large enterprises each boasting capital of more than NT$200 million (US$6.06 million at US$1 = NT$33) and of small ones each with less than NT$1 million (US$30,303) in capitalization, with such trend continuing for the fourth consecutive year, according to a white paper on Taiwan's small- and medium-sized enterprises (SMEs) recently released by the Ministry of Economic Affairs (MOEA).
The white paper indicates that SMEs in Taiwan usually experience operational instability in the first five years, with most frequently experiencing extreme hardship in the first two years. Generally, about 40 % of these SMEs cannot stay afloat more than five years.
The paper quoting the statistics compiled by the Ministry of Finance (MOF) discloses that in 2006 the proportion of Taiwan's SMEs surviving more than five years dropped by one percentage point from two years ago to 61.9% and the corresponding figure of those surviving for more than 10 years stood at 42.1%. In contrast, the proportion of large enterprises operating for more than five years hit a record high of 81.5% and that of ones making it more than 10 years was nearly 60%.
Wen-ku Huang, deputy director-general of Small & Medium Enterprise Administration (SMEA) under MOEA, says that the short lifecycle of SMEs were mainly due to limited operating resources, inadequate capability of handling difficulties, and weak financing. Huang likens Taiwan's SMEs to small boats in stormy seas, with most unable to stand the impact of big waves that inevitably capsize a proportion.
Vicious Cycle
Taiwan's manufacturing environment has been deteriorating over the past decade, making life harder for many SMEs, with those that could not weather the hardship suspending operations or closing up. Nevertheless, many more continue to brave the harsh trend, which explains the sharp growth in the number of SMEs springing up on the island, setting up a vicious cycle. The saturated market leads to fierce competition and ever-decreasing market share. Ironically the inherent nature of SMEs make them unattractive clients for bank loans, while weak financing is a key factor behind their demise.
In contrast, the 1970s saw Taiwan's numerous SMEs, over 90% of the island's businesses then, create the economic miracle for the island. In the 1990s, about 80% of Taiwan's total employed worked for SMEs and contributed 40% to its GDP, although using only 30% of the island's social assets.
The last four years have seen the "M" virtually vanish from the acronym SME as the number of enterprises capitalized at more than NT$200 million (US$6.06 million) has grown to 6,800 from 6,200 and those capitalized at less than NT$1 million (US$30,303) has shot up to 810,000 from 730,000, hence forming the M-shaped profile of the business demographics, with the dip in the M signifying the missing proportion of medium-sized businesses.
Some 40% SMEs Have Quit
In the same period, 40% of SMEs have suspended operations, withdrawing from the market, with such scenario being seen as a waste of investment capital, causing rising unemployment and reduced family income, Huang remarks.
Last year the proportion of Taiwan's exports generated by SMEs tumbled to 17.9% from 26.4% recorded 10 years ago, with an incidental drop to 76.7% in the proportion of workers in SMEs, both far below the corresponding percentages posted by South Korea. The proportion of the production value created by SMEs stood at 40% in 1986, with such figure plunging to 29.8% in 2006.
To upgrade the competitiveness of SMEs, the government has established since1997 many incubation centers island-wide to help cultivate SMEs that have moved in the centers. So far the government has attracted a total of 2,817 SMEs to set up shop in such centers and is glad to see more than 90% of them survive the first three years, which is much more encouraging than the figure for SMEs overall. Heartened by such reassuring trend, the government will keep encouraging more SMEs to grow their feathers under the protective guidance of the centers.
Recently the government has budgeted NT$10 billion (US$303.03 million) to help SMEs improve manufacturing processes and explore international markets as well. The assistance is a shot in the arm for SMEs that do need financial support to regain their former glory, Huang comments. (JL, September 2007)
| |
|
沒有留言:
張貼留言