| Prime News | | ![]() | ![]() | Subprime Storm Damages Taiwanese Financial Firms Further for SIV Investment
Taipei, Oct. 24, 2007 (CENS)--The effect of the U.S. subprime housing-loan storm has extended from the CDO (collateralized debt obligation) to the SIV (structured investment vehicle) market, inflicting further damages on some Taiwanese financial institutions.
Credit Suisse estimated total exposure of domestic financial institutions to the U.S. SIV market at NT$15.6 billion, with SinoPac Financial Holding accounting for NT$11.4 billion, or 73%, and the remainder belonging to Chinatrust Financial Holding, Yuan Financial Holding, and First Financial Holding. All will have to make provisions for potential loss from the exposures.
SIV is based on good assets boasting AA and higher credit ratings, appropriated by U.S. financial institutions. The market has been suffering liquidity problem recently, due to the effect of the subprime mortgage storm.
Chang Li-chuan, Sinopac spokesman, noted that the company already made provision of US$6 million for the potential loss from the exposure in August and September and will increase the amount by year end. Insiders assessed the company's loss at NT$2.1 billion, for a loss rate of 18%.
Chinatrust also made provision of 316 million in the third quarter, 18% of its exposure of NT$1.7-1.8 billion, while Yuanta set aside provision of NT$146 million for NT$500 million of exposure, with the loss rate reaching 28%.
Meanwhile, Shin Kong and Fubon made provisions of NT$1.031 billion and NT$2.5 billion, respectively, in September for covering loss from the subprime mortgage storm.
The investment loss has prompted foreign investors to downgrade financial stocks, selling off lots of such stocks in the recent one month, notably those of Shin Kong, Fubon, and SinoPac.
SinoPac's Chang Li-chuan pointed out that the company has invested US$350 million in SIV, less than one sixth of its total overseas assets worth US$2 billion, adding that provision for the exposure represents only paper loss now.
He reported that under the requirement of the U.S. Federal Reserve Board, major SIV issuing institutions, including Citibank, BankAmerica, and J. P. Morgan Chase, have decided to set up jointly a super US$80-100 billion fund to stabilize the SIV market, whose capacity stands at US$400 billion.
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| | ![]() | | | BOFT Defers Import Permit for 54 Chinese Goods
Taipei, Oct. 24, 2007 (CENS)--Due to interference of ranking officials and opposition of domestic industries, the Bureau of Foreign Trade (BOFT), under the Ministry of Economic Affairs (MOEA), yesterday (Oct. 23) suspended an inter-ministerial meeting for screening the proposal of allowing import of 54 Chinese goods.
The BOFT previously decided to permit import of such goods under the strong request of the European Chamber of Commerce, enabling the latter's member firms to ship such goods from their Chinese plants to Taiwan. Majority of the goods are garments, including jackets, overcoats, and trousers, for both men and women, made of wool and synthetic fiber.
Exposure of the decision, though, immediately elicited strong opposition from related industries, including the Taiwan Knitting Industry Association and the Taiwan Underwear Industry Association, whose opinions are influential on political leaders, especially during the election season.
Fate of the proposal will become clear only in the next regular inter-ministerial meeting screening import of Chinese goods two months later.
Chen Min-tung, chairman of the Cabinet-level Mainland Affairs Council noted that the import liberalization is still a proposal of staffs and has yet to become a policy, complaining premature exposure of the proposal by the media, which he said would affect the market.
The European Chamber of Commerce has yet to comment the development, apparently watching closely the situation before determining its response.
Since Taiwan's accession to the World Trade Organization (WTO) more than five years ago, the government has been adhering to the policy restricting import of Chinese goods into the island, which was questioned strongly by Chinese representatives during a trade-policy review meeting of the WTO last year. Both the American Chamber of Commerce and European Chamber of Commerce have also been pressuring the government to lift the restrictions, which block their member firms shipping products of their Chinese plants to Taiwan.
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| | ![]() | | | Private Investments to Hit Highest Record in Seven Years
Taipei, Oct. 24, 2007 (CENS)--Thanks to the aggressive expansion undertaken by the manufacturers of TFT-LCD (thin film transistor-liquid crystal display) and wafers, Taiwan's private-sector investments will hit the highest record this year in seven years, according to a survey conducted by the Department of Statistics (DOS) under the Ministry of Economic Affairs.
The statistics have been compiled by surveying via questionnaires 3,700 domestic firms, with a response rate of 81.03%. The DOS noted close to 60% of domestic firms with over 200 employees have made concrete plans to increase investments this year.
According to the tallies compiled by DOS, the amount of investment on fixed assets by the manufacturing industry waned between 2001 and 2003 because of the sagging economy. But the private-investment strength began picking up in 2004. The tallies showed the private-sector investment totaled NT$734.5 billion (US$22.6 billion at US$1:NT$32.5) last year and will further grow this year.
The results of the survey showed 43.1% of respondents said they would increase investments this year from last year's level. About 60% of domestic large-sized firms will increase investments this year, representing a growth of three percentage points from last year.
A high-ranking official of the MOEA's statistics department noted domestic private-sector investments are heating up this year, with the top investment item being the replacement of used production equipment.
The DOS survey showed 26.38% of domestic manufacturing firms will expand investments this year, up 4.17 percentage points year-on-year. In terms of the size of the firms, close to 35% of large-sized firms and 30% of medium-sized firms have plans to expand investments this year, indicating that the larger the firms the stronger the desire to expand investments.
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| | ![]() | | | Taiwan Cement, Chia Hsin Cement to Merge H.K. Subsidiaries at End-Oct.
Taipei, Oct. 24, 2007 (CENS)--Taiwan Cement Corporation recently announced that its subsidiary—Taiwan Cement International will officially merge Chia Hsin Cement Corporation's subsidiary—Chia Hsin China Corp., which is listed on the Hong Kong Stock Exchange, at the end of October.
Both Taiwan Cement and Chia Hsin Cement are Taiwan's leading cement producers. Taiwan Cement anticipated the merger would be completed on January 1, 2008, with the move to help both sides become one of the top-three cement producers in mainland China.
In June last year, both Taiwan Cement and Chia Hsin Cement jointly announced that they would merge their operations in the mainland. Since that time, both companies have been working towards realizing the merger.
Recently, Chia Hsin Cement said Taiwan Cement has already acquired 284 million shares in its subsidiary in the mainland, almost meeting 90% of original merger goal. With the acquisition of the shareholdings, Taiwan Cement International is seen to have acquired Chia Hsin China.
Taiwan Cement said the Hong Kong Stock Exchange has agreed that the merger of between Taiwan Cement International and Chia Hsin China will be effective by the end of October if Taiwan Cement International can acquire 90% of the outstanding shares of Chia Hsin China.
Taiwan Cement noted it would negotiate with Chia Hsin if its staff will remain stationed at the latter's Jingyang plant in the mainland.
It is expected that the quoting prices for cement in southern China market will be raised in November, causing more cement producers to join the sector in the fourth quarter of this year.
An institutional investor estimated Taiwan Cement will see sales peak in the fourth quarter of this year, up over 15% from the preceding quarter. It is anticipated Taiwan Cement will see sales grow at a rapid pace this year because of its large expansion in production capacity there.
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| | ![]() | | | Taiwanese Set-Top Box Makers Tapping Mainland Chinese Market
Taipei, Oct. 24, 2007 (CENS)--Taiwanese set-top box makers are approaching SVA Group of mainland China over its orders after the group recently won contracts to supply the boxes to television stations based in Zhejiang and Hebei Provinces of the mainland.
The mainland is digitizing its television signals in preparation for the 2008 Beijing Olympic Games. The box is a crucial end-user tool for the digitization. Industry watchers estimate the mainland's market for the boxes at over RMB100 billion (US$13 billion at US$1:RMB7.5).
To cultivate the home-grown digital TV industry, the mainland authorities instructed SVA's research unit in 2002 to develop mainland Chinese version of generic coding of moving pictures and associated audio information, dubbed as AVS. SVA claims AVS is more efficient than the internationalized MPEG-2 technology.
SVA executives pointed out that AVS is a completely new format developed by the mainland itself and has become the mainland's standardized digital technology. Most of all, the format commands much lower royalty than does any existing standards.
Mainland Chinese industry watchers estimated the mainland's AVS market at multi trillion yuan because the format will be built in the mainland's digital televisions, teleconferencing telephones, high-density optical discs, video conferencing systems, digital surveillance systems, and mobile video telecommunications systems. Digital TV products like set-top box will be the first to be equipped with the technology.
SVA plans to open a subsidiary at yearend to receive and place orders for set-top boxes, Internet Protocol televisions (IPTVs), chips, handheld TVs and digital TV remote controllers.
The mainland's industry watchers pointed out that SAV will very likely farm out production of its AVS set-top boxes to contract manufacturers since the demands will top hundreds of millions of units. In response to the report, many Taiwanese set-top box manufacturers including Universal Microelectronics Co., Ltd. and Prime Electronics & Satellitics Inc. have approached SVA over deals of making the boxes for it.
SVA executives pointed out that mainland Chinese manufacturers including Huawei Technologies Co., Shinco, Xiamen Overseas Chinese Electronics Co., Ltd., and Hiense have begun making AVS set-top boxes and have yet to sign contracts with Taiwanese suppliers. However, industry watchers expected SVA to deliver orders to Taiwanese contract suppliers by the end of this year.
They said the mainland will begin pushing digital TVs next year and close analog broadcasting in 2015.
Market research organization IMS Research forecast the mainland consumption of set-top boxes to reach 600 million systems by 2015 after the mainland's demands for the gadgets top RMB50 billion (US$6.6 billion at US$1:RMB7.5) in 2010.
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| | ![]() | | | ZyXEL Executive Forecasts Bright Prospects for WiMAX Market
Taipei, Oct. 24, 2007 (CENS)--ZyXEL Communications Corp. Chairman S.Y. Chu recently projected his company's shipment of WiMAX equipment, including end-user and office-end machines, will likely cross hundreds of thousands of systems a month next year from around 10,000 systems for the moment.
Chu pointed out his company started developing WiMAX technologies two years ago after long focus on access equipment for broadband, wireless and optic-fiber systems since 1987, when the company was opened.
Chu claimed his company is the Taiwanese networking-equipment supplier scoring fastest advance in the development. He said his company directly jumped in the very beginning into the development of mobile-type WiMAX technology codenamed 802.16e in cooperation chipmaker Runcom.
So far, the company has introduced second- and third-generation WiMAX products including end-user and office-end equipment and begun mass-producing the products. He estimated large-scale shipment of his company's WiMAX products will come in 2009.
Although WiMAX sales will account for barely 5% of the company's revenue, Chu said his company has allocated one tenth of its 6-700 research and development specialists to engage in WiMAX projects.
In May this year, ZyXEL took part in 39 WiMAX test projects worldwide launched by big players. So far, four to five of them have entered into commercial operation.
ZyXEL has entered into cooperation with equipment suppliers Alcatel Lucent and Nortel, with Nortel including the firm into its WiMAX Wave2 project. ZyXEL has even become first Taiwanese supplier to receive orders from the U.S. carrier Sprint Nextel.
Chu analyzed that WiMAX technology will soon enter video/audio equipment, set-top box, and VoIP equipment for households; VoIP and networking-storage systems for enterprises and telecom networks.
Cxhu's company projects to boost WiMAX sales to account for 10% of its revenue next year from this year's 5%.
Foreseeing a bright future for the WiMAX market, Goldman Sachs & Co. recently lifted its target price for ZyXEL to NT$70 per share from previously projected NT$65.
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| | ![]() | | | Yulon Nissan Debuts Locally-made Livina Mini-hatchback
Taipei, Oct. 24, 2007 (CENS)--Yulon Nissan Motor Co. of Taiwan recently demonstrated its locally made mini hatchback Livina, and claimed that the new model would replace the existing March to become Nissan's most important entry-level car.
Yulon Nissan, the local agent of both locally made the imported Nissan and Infiniti car models, aims to grab a 13% share in next year's domestic new-car market.
Some industry analysts pointed out that Livina combines the features of a sedan, sport utility vehicle (SUV), and hatchback, making it a pioneer with special specifications and market positioning without direct rivals in the market now. The new model is expected to help Yulon Nissan explore a new market segment and benefit the company's revenue and profits.
Kenneth Yen, CEO of the Yulon Group and chairman of Yulon Nissan, personally hosted the new-car debut, implying the importance of Livina in Yulon Nissan's model lineups. He claimed that the sluggish domestic new-car sales would be only temporary and Yulon Nissan would continue to push new products to meet consumers' needs.
Even amid sluggish sales for domestic automobiles in the past two years, Yen stressed that both Yulon Motor Co. (local producer of Nissan and GM car products) and Yulon Nissan's operations have been profitable and smooth, while he is also optimistic about futures market rebounds. The CEO, however, stresses that he would continue to push the cost-saving works at Yulon's sub-groups.
Industry sources pointed out that Yulon Nissan originally planned to push the Livina in April this year but delayed the debut due to the sluggish demand in local automobile market. To confront the highflying gas prices, Yulon Nissan intently positioned the new Livina to be a crossover models simultaneously own the advantages of mini-car's fuel-saving, sedan's spacious cabin, and SUV's freestyle interior.
In Taiwan, the Livina has two engine options, including 1,600cc and 1,800cc, and two model styles: five and seven-seat models. The basic 1,600cc Livina is priced under NT$500,000 (US$15,150 at US$1: NT$33) so as to attract more young buyers.
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| | ![]() | | | Motive Power to Commercialize Lithium/Lead-acid Battery Electric Scooter in Earl
Taipei, Oct. 24, 2007 (CENS)--The Motive Power Industry Co. Ltd. (PGO brand), the fifth-largest powered two-wheeler (PTW) manufacturer in Taiwan and a major PTW exporter, recently claimed that it has successfully developed the world's first electric scooter powered simultaneously by lithium-ion/lead-acid batteries.
In addition, Motive Power also demonstrated its latest product, the 500cc Bug Racer high-end buggy, which is expected to explore the recreational market in both Europe and the United States.
To meet the fifth-stage emission standard in Taiwan, which will be effective on the first day of 2009, the company also pushed the G-Max 150cc scooter with electronic fuel-injection (EFI) system. The firm also claimed that it would gradually extend its EFI products to all models sold in Taiwan.
In recent years, Motive Power has been actively pushing high-end scooter models with state-of-the-art styling designs and gradually expanding its share in the highly competitive domestic PTW market.
In overseas markets, the PGO branded PTWs, ATVs, and buggies have been popular, especially in Europe and the U.S.
After a management reshuffle last year, Motive Power has been enjoying steady sales growth and pouring increasing amounts in product development. All efforts have been proven effectively in helping the company escape price-cutting competitions with mainland Chinese rivals.
Motive Power assistant vice president Lee Rong-yi said that his company has chosen buggy as one of its product lines and invested tens of million NT dollars to construct the largest coating line among local PTW makers for such niche products. He added that the buggy is a niche product of Motive Power, for example, the new Bug Racer is priced at about 10,000 euro per unit in Europe.
Motive Power tied up with local WIZ Energy Technology Co., Ltd. to develop the world's first lithium-ion/lead-acid battery electric scooter. According to Chen Chih-chao, the R&D project leader at Motive Power, the new lithium-ion battery stores the electricity and supply the more stable electricity to the traditional lead-acid battery, which outputs higher-voltage power to drive the motor.
Such design, Chen explained, could effective prolong the product life of lead-acid batteries (most of which used to own short life due to frequent deep discharges), and also greatly cut the overall weight of such vehicle. On Motive Power's new dual-type battery electric scooter, the lithium-ion battery pack was designed to be portable for recharge at home, which minimizes the perennial problem for residents in high-rises to tote heavy battery packs home.
Chen pointed out that the new battery-solution electric scooter has won hot market responses because it is priced very similar to traditional counterparts, and would be mass produced in early 2008 for sale globally.
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| | ![]() | | | Taiwan Ranks Asia's No. 4 in Corporate Governance for 2007
Taipei, Oct. 24, 2007 (CENS)--A report on corporate governance on Asian enterprises for 2007 by CLSA Asia-Pacific Markets, an affiliate of France-based Credit Lyonnais, showed that Taiwan ranks No. 4 in general corporate governance among Asia's 11 economies in 2007, up one rank from a year earlier.
The report indicated that in overall corporate performance in Asia, Taiwan is next to Hong Kong, Singapore and India while ahead of Japan, South Korea and China. The report also showed that Taiwan Semiconductor Manufacturing Co. remains as Taiwan's best enterprise in terms of corporate governance and its followers in sequence are China Steel Corp., United Microelectronics Corp., BenQ Corp., and Vanguard International Semiconductor Corp.
Insiders said that Taiwan's enterprises have in recent years been improving obviously, particularly after 2005 when the government broadly revised its accounting criteria and the Cabinet-level Financial Supervisory Commission has laid more emphasis on searching out insider trading among the listed enterprises on the island.
The report pointed out that Hong Kong is strong in law enforcement and is quite active in protecting small corporate shareholders. Singapore is good at overall corporate management, but a little weak in the protection of small corporate shareholders. India's large-sized enterprises are excellent in overall management; however, its small-sized ones are evidently ill-operated. As for China, the country's legislative structure has been improved a lot, yet the execution of the laws still lags behind.
The report was based on the result of the survey of 582 listed companies in Asia's 11 countries and areas, which were assessed for discipline, transparency, independence, responsibility, reliability, fairness, and social duty.
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| | ![]() | | | Taiwanese Furniture Makers Jointly Explore Middle East Market
Taipei, Oct. 24, 2007 (CENS)--To promote the image of Taiwan's furniture industry globally, Taiwan External Trade Development Council (TAITRA) has helped domestic furniture manufacturers jointly rent exhibition booths at the upcoming Index Dubai 2007, running from Nov. 1-5 at Dubai International Exhibition Center, U.A.E.
Index Dubai is a leading annual trade exhibition in the Middle East for textile, furniture, and interior design. This year, some 1,600 exhibitors from more than 60 countries and areas worldwide are expected to participate in the exhibition and Taiwan's recently organized "Team Taiwan Glass, TTG" is going to make its international debut in Index Dubai 2007.
In addition to Taiwan Mirror Glass Enterprise Co. (TMG), the founder of TTG and a leading glass furniture maker in Taiwan, TTG is reportedly made up of seven member manufacturers who will display products at this year's Index Dubai. Among the seven are Founder Aluminum Co., Der Yih Enterprise Co., paper Fabric Enterprises, Chong Wong Kitchen Equipment Co., Gin Jye Ming Glass Co., and Hung Wen Hsin Co.
A specially designed pavilion will house participant TTG members at Index Dubai 2007, which will display their newly developed innovative products, hoping to impress both buyers and visitors the exhibition.
TAITRA believed that the market in the Middle East is becoming more and more lucrative as the purchasing power of consumers there is increasing along with the expanding wealth resulting from ballooning oil prices, particularly in recent years. Furniture market there is thriving together with the booming construction industry in the region.
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| | ![]() | | | Qisda to Mass Produce WiMAX-based Handsets in 2008
Taipei, Oct. 24, 2007 (CENS)--With worldwide interoperability for microwave access (WiMAX) communication technology going hot and driving quite a few domestic suppliers to move to develop related products, Qisda Corporation, a Taiwan-based supplier of electronics products, will start to mass produce WiMAX-based handsets next year, according to company sources.
As its sales of core products starting to turn around, Qisda, with profitable non-core business, is expected to see its business operation turn from red to black in the third quarter of this year.
Among Taiwanese suppliers of networking devices, Gemtek Technology Co., Ltd. and Alpha Network Inc. are scheduled to launch WiMAX modules for use in notebook PCs next year, while ZyXEL Communications Corp. debuts its WiMAX-based network card for notebook PCs. Besides, ASUSTeK is also interested in WiMAX, already having poured resources in related R&D.
After being spun off from BenQ Corporation, Qisda is specializing in production and runs six business divisions. The firm has heavily streamlined its mobile phone business division, and turned to focus on development of integrated digital convergence products.
So far, Qisda has unveiled E72 and T80 series handsets as its mainstream products for sale in the fourth quarter, which will be sold under BenQ. E72 series are scheduled to be on sale in late October, and T80, built with near field communication (NFC) technology, are already adopted for security systems jointly developed by Farglory Land Development Co., Ltd. and Chunghwa Telecom Co.
Qisda's E72 has been well recognized, which is developed with Microsoft's operatng system and compact exterior design, and built with unlicensed mobile access (UMA) technology. The handset has been sent to Europe for testing, and will be launched with British Telecom as the first UMA-built-in smartphone in Europe.
Qisda recently showcased a prototype of its WiMAX-based phone in Taipei, and plans to take E72 as a basis to develop a dual-system phone for enhanced data rates for GSM evolution (EDGE) and WiMAX, as well as WiMAX modules in smaller sizes and with power efficiency, next year. The firm expects to start deliver those new items next year as soon as possible. In addition, Qisda will start to develop other multi-mode PDA and PDA phones in the year after next year.
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| | ![]() | | | Taiwan's Production Value of WiMAX to Reach NT$140 B. in 2012
Taipei, Oct. 24, 2007 (CENS)--Taiwan is expected to see production value of products based on worldwide interoperability for microwave access (WiMAX) technology reach NT$140 billion by 2012, according to Steve Chen, Minister of Economic Affairs.
Taiwan government signed memorandums with the world's top five suppliers of WiMAX-based products, namely Alcatel-Lucent, Motorola, Sprint-Nextel, Starent and Nokia Siemens Networks, hoping to join forces with them to form an alliance for the technology on the island.
In fact, Taiwan's effort on developing WiMAX has paid off, as WiMAX Forum, an industry-led, non-profit organization to promote the technology, decided to set up world's first mobile lab in Taiwan and already approved the Taiwan-based Advance Data Technology as a WiMAX certification firm. The organization plans to set up the second certification lab on the island by the end of this year.
Officials of Taiwan's MOEA said that WiMAX Forum will send a team to Taiwan to examine companies applying to become official certification labs. Accordingly, they will include SGS Far East Ltd., Taiwan (SGS), Compliance Certification Services Inc. (CCS) and Telecom Technology Center (TTC). The result is scheduled to be released as of the end of December.
WiMAX Forum has less than ten certification labs in the world, with two to be sited in Taiwan. As International Telecommunication Union (ITU) already added WiMAX as one of international communication standards and hammered out the spec. of WiMAX-based products, insiders said that the next two years will be a key period for developing the technology.
Patrick Plas, chief operating officer of Alcatel-Lucent's Wireless GSM/WiMAX business division, predicted that with applications of wireless communications keeping increasing, handheld devices and chips compatible with the WiMAX802.16e-2005 standard are expected to hence become popular, and PCs will widely adopt WiMAX networking functions after 2008.
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