| Prime News | | ![]() | ![]() | Taiwan's First Cross-Border ETF Ready to Hit the Market
Taipei, Oct. 2, 2007 (CENS)--Taiwan's first cross-border ETF (Exchange Trade Fund), based on stock price index for the world's 50 leading semiconductor firms, is scheduled for inauguration at the GreTai Securities Market, or the over-the-counter market, in the first quarter of 2007.
The ETF will be launched by Primasia Investment Trust, which cooperates with S&P in compiling the EFT index, and will be traded in NT dollar initially, before converting to U.S.-dollar denomination in the second stage. Trading for the EFT will be delivered in cash, rather than stock certificates.
If the product proves to be successful, Primasia plans to roll out second or even third ETFs, with the former targeting at energy stocks initially.
Of the 50 constituent stocks for the cross-border semiconductor ETF index, nine are Taiwanese firms, for a combined share of 17%, including TSMC (Taiwan Semiconductor Manufacturing Corp.), UMC (United Microelectronics Corp.), Mediatek, ASE Inc., Siliconware, Powerchip, Realtek, and Epistar.
Jao Meng-yu, Primasia chairman, noted that the company has designed the EFT, in view of the increasingly prominent role of Taiwanese, Korean, and Japanese semiconductor firms in the global semiconductor industry, expecting massive subscription to the product by institutional funds, which will boost demand for and liquidity of semiconductor stocks.
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| | ![]() | | | CBC Will Adhere to Own Micro-Adjustment Interest Rate Policy
Taipei, Oct. 2, 2007 (CENS)--The Central Bank of China (CBC) will stick to its own monetary policy, making micro interest-rate adjustment mainly on inflationary situation, rather than following the footsteps of the U.S. Federal Reserve Board (Fed), reiterated Perng Fai-nan, CBC governor, at the Legislative Yuan yesterday (Oct. 1).
Perng also referred to forecast of 2.47% consumer price hike in the second half, made by the Directorate General of Budget, Accounting, and Statistics (DGBAS), and low level of actual interest rates, with one-year deposit interest now standing at 1.851%, statement which market insiders interpret as strong implication for further interest-rate hike by year end.
The governor explained that the CBC has been adhering to micro-adjustment policy for interest rates, raising the policy rate from 1% to 2% previously, different from the Fed's vigorous move, which boosted the Federal Funds Rate from 1% to 5.25%, before slashing it to 4.75% now.
Perng pointed out that despite the litany of interest-rate hikes in the past couple of years, weighted average loan rate stood at 3.415% in August this year, even lower than 3.548% in January 2006.
Perng stressed that the CBC must make pre-emptive policy adjustment on the demand side, due to the time lag of the effect of monetary policy on economic activities.
CBC and the People's Bank of China are the two central banks worldwide raising interest rates recently, bucking the global interest rate-reduction trend, initiated by the Fed, which slashed the Federal Funds Rate by 0.5 of a percentage point in mid-September.
Meanwhile, Perng noted that the CBC has been quite cautious in coping with exchange-rate fluctuation, stressing the exchange rate is determined by market supply and demand, with the CBC only making occasional adjustment on eruption of unexpected factors. "You have to be humble in the face of exchange-rate fluctuation, which is highly unpredictable," expressed Perng.
As a result, market insiders believe that the CBC will adopt a generally hands-off policy towards the mounting appreciation pressure for the NT dollar, which closed at US$1=NT$32.58 last Saturday (Sept. 29), up 0.05 of a percentage point over the end of 2006 or 1.59 percentage points over a year earlier.
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| | ![]() | | | Taiwan Cement, Chia Hsin Cement to Benefit From Merger
Taipei, Oct. 2, 2007 (CENS)--Taiwan Cement Corporation and Chia Hsin Cement Corporation today (Oct. 2) will complete merging their subsidiaries—Taiwan Cement International and Chia Hsin China, both listed on the Hong Kong Stock Exchange.
A foreign institutional investor said Chia Hsin Cement will become the largest beneficiary after the merger and Taiwan Cement will see better deployment integration in the mainland marketplace.
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 surpass that of the first.
It is estimated Jingyang and Union plants will be able to post 80 million and 60 million renminbi this year, respectively if the price quoted for cement increases 20 renminbi to reach between 260 and 280 renminbi per metric ton in the mainland.
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 Yingte plant in Guangdong province has begun making profits since the first quarter of this year.
Because of the merger of Chia Hsin China into Taiwan Cement International, Chia Hsin Cement will hold 29% stake in Taiwan Cement International. Accordingly, the merger will help Chia Hsin Cement directly share the operating effects of Taiwan Cement's Yingte plant.
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 between Taiwan Cement International and Chia Hsin China.
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| | ![]() | | | Taiwan Power, Taiwan Water, Taiwan Cogeneration Tap the Middle East
Taipei, Oct. 2, 2007 (CENS)--Taiwan Power Company, Taiwan Water Corporation and Taiwan Cogeneration Corporation have formed an investment consortium by cooperating with a Saudi Arabia concern to make investments in the Middle East nation, said F.T. Hsieh, deputy vice minister of the Ministry of Economic Affairs.
Taiwan Power, Taiwan Water and Taiwan Cogeneration together invest NT$3.6 billion (US$110.76 million at US$1:NT$32.5) to hold an 18% stake in the joint-venture consortium.
The consortium has recently passed through the qualification bidding screening for the establishment of a water and power plant in eastern Saudi Arabia. It is estimated that the investment plan in the eastern Saudi Arabia will amount to NT$100 billion (US$3.07 billion).
Nevertheless, the consortium is requested to win a technical bid to realize the investment plan.
According to an announcement released by the Saudi Arabian government in May, the investment plan included an oil-fired power plant with base load capacity of between 850MW and 1,100MW, equivalent to two generation units of the Taichung Thermal Power Plant, and a desalination plant with daily capacity of one million metric tons.
Hsieh noted Taiwan has presented its investment power in winning the qualification bidding in the investment project as contenders include such international-class firms as Korean Power Co. of South Korea and Toshiba Corp. of Japan.
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| | ![]() | | | Smart Phones Forecast to Be Hot Product for Taiwan's Contract Suppliers
Taipei, Oct. 2, 2007 (CENS)--Third-generation (3G) mobile phones featuring many smart functions are expected to be darling products for Taiwanese contract manufacturers next year thanks to booming demands.
Strategy Analytics forecast sales of handsets in this category embedded with operating systems from Symbian, Microsoft and RIM to shoot up 42% next year.
The market research organization pointed out that successful rollout of Apple's iPhone has inspired heavyweights from lines other than computers, such as gaming, TV and video appliances, to introduce high-end multifunctional phones, contracting manufacturers to make the phones for them.
Strategy Analytics pointed out search engine giant Google and global positioning system (GPS) player Garmin will likely outsource orders next year to contract handset makers.
In light of the trend, many Taiwanese contract suppliers have flooded into manufacturing of highly integrated phones like PDA phones and smart phones. The Taiwanese manufacturers include Asustek Computer Inc., Arima Communication Corp., Inventec Appli@nce Corp., Compal Communications Inc., Chi Mei Communication Systems and Gigabyte Communications Inc.
Compal's executives recently said their company planned to boost sales of PDA phones to account for 25% of its total revenue next year from this year's barely 10%. Arima's executives noted their company would boost PDA phone shipment to two million units next year from this year's 400,000 units. Their goals are far behind No.1 HTC Corp.'s 12 million-system guidance.
Taiwanese manufacturers pointed out that although high-end smart phones command higher profits than do entry-type phones, the former requires higher research and development spending. Accordingly, manufacturing high-end phones will not be profitable unless the minimum contract volume exceeds 300,000-500,000 systems.
Strategy Analytics feels that the flagship smart phones for next year must be 3G and 3.5G types integrated with WLAN and GPS functionalities. The organization thinks the new functionalities will sway telecom carriers to promote the phones.
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| | ![]() | | | 15 Member States Participate in CBIP Held in Taipei
Taipei, Oct. 2, 2007 (CENS)--Representatives from 13 members of the non- governmental Asian Trade Promotion Forum (ATPF), which now has 21 members including Taiwan's Taipei World Trade Center (TWTC), took part in Taiwan-held Capacity Building Initiative Program (CBIP) yesterday.
It is the fifth anniversary of the program, but it is the first meeting of the program held in Taiwan. Taiwanese organizer of the program, the quasi-government Taiwan External Trade Development Council (TAITRA), said holding the program in Taiwan will help bolster Taiwan's visibility in global trade regard.
TAITRA, which runs TWTC, said the program offers a platform for members to exchange and observe each other's experiences in international trade promotion so that they can upgrade the functionalities and service quality of their international trade promotion organizations.
TAITRA will help participants in the program to make an inspection tour of a high profile exhibition hall recently completed in Nankang district of the Taipei City, and arrange them to take the island's prominent High Speed Railway to central Taiwan to observe development of cultural and recreation industries there.
TAITRA executives noted that ATPF was initiated by Japan External Trade Organization (JETRO) to foster interflow and learning of international trade promotion organizations in the 20-some Asian economies, including Taiwan, mainland China, South Korea, Japan, Australia, Hong Kong, Macau, Thailand, Vietnam, Indonesia, India, Malaysia and Sri Lanka. JETRO now acts as secretariat of the forum.
TAITRA Chief Executive Officer and President Yuen-chuan Chao noted that his organization successfully convinced ATPF to hold its fifth CBIP in Taiwan this year during the forum's annual meeting held in Sydney early this year
At the opening ceremony, Chao noted mainland China sends three representatives to attend the meeting while Nepal, Sri Lanka and Mongolia send their trade representatives to Taiwan for the first time.
TAITRA expected the three-day CBIP activity to amplify the effect of promoting Taiwan's international trade status at global level in the wake of three significant international convention and exhibition meetings including the Seminar on MICE Opportunities in APEC Forum held late last month.
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| | ![]() | | | CPT, LPL Settle Patent-infringement Suit to Cross-license Patented TFT-LCD Techniques
Taipei, Oct. 2, 2007 (CENS)--Chunghwa Picture Tubes, Ltd. (CPT), the third-largest thin film transistor-liquid crystal display (TFT-LCD) panel maker in Taiwan, recently announced that it would soon sign an agreement with South Korean counterpart LG.Philips LCD Co., Ltd. (LPL) to settle a patent-infringement lawsuit and cross-license mutually-patented technologies, according to industry sources.
LPL accused CPT of infringing six of its patented TFT-LCD technologies in 2002 and asked for a compensation of US$53.5 million. About two weeks ago, LPL even claimed that the court judge has agreed to double its compensation amount.
The two parties, however, rapidly reached a settlement. According to CPT, it has signed a memorandum of understanding (MOU) to settle the lawsuit with LPL and would soon sign a formal agreement to cross-license patented technologies while withdrawing all the previous litigations.
After CPT's announcement, both CPT and its parented company Tatung Co.'s stock prices hit a record high in the past month.
Industry insiders said that the panel supply shortage is expected to continue into 2008, which could be judged from both the continuously rising panel prices and some system makers' aggressive moves to tie up with panel suppliers, including Chi Mei Optoelectronics Corp., or CMO, Taiwan's No. 2 TFT-LCD panel supplier, recently announced plans to acquire a 7.68% stake in TPV Technology Ltd., the world's largest maker of monitors.
In addition, big international monitor brands such as LG and Samsung have in turn upgraded their LCD monitor outsourcing rates and "required" contract producers to self-procure the needed panels rather than rely on "consignment" as before. All signs showed that the panel supply shortage will linger for a while, the sources added.
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| | ![]() | | | Major Brands to Push Blu-ray Combo Drives in Q4
Taipei, Oct. 2, 2007 (CENS)--Major global optical-disc drive brands are scheduled to push blu-ray disc (BD), DVD/CD Combo drive models in the fourth quarter this year, including Hitachi LG, Panasonic, BenQ and Lite-On.
The increasing popularity of BD combo drives is expected to stimulate demand for pre-recorded BDs.
According to optical-disc drive makers, major global brands are planning to push BD, DVD/CD combo drives to break through the limited application range of BD burner models so as to accelerate the popularity of BD discs.
In conjunction with the continuous demonstration of BD combo drive models, some pre-recorded media companies are expected to be gradually benefited by the expanding market.
Industry insiders pointed out that currently most of the pre-recorded BDs are produced by Sony of Japan, but some Taiwanese pre-recorded media makers are expected to win increasing contract orders when the overall market demand increases.
BD-ready pre-recorded disc makers in Taiwan include Bestdisc Technology Corp. and U-Tech Media Corp. The former has procured related production equipment, while the latter has installed front-section production equipment and would contract its parented company Ritek Corp. (Taiwan's largest optical-disc producer) to be responsible for the rear-section disc production works.
U-Tech deemed that the pre-recorded BD market would take off in 2008 and this year would be only a burgeoning period. This year, U-Tech said, the HD DVD films would be the mainstream in the new-generation DVD market and it has won some pre-recorded HD DVD orders.
Taiwan's top-two optical-disc makers, Ritek and CMC Magnetics Corp., plan to kick off mass production of BD discs in 2008.
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| | ![]() | | | Taiwan Sees Annual Salary Growth Hit Seven-Year High in July
Taipei, Oct. 2, 2007 (CENS)--Thanks to stable economic climate, the annual rise of regular monthly pay in Taiwan's non-agricultural sector stood at 2.03% in July of this year, the highest of its kind for the same month in seven years and above 1% for 14th consecutive month, according to the statistics released by the Cabinet-level Directorate General of Budget, Accounting & Statistics (DGBAS).
The growth in pay increase for financial & insurance industries topped with 11.8%, much higher than that of the construction, medicine and health care, and manufacturing industries, which posted the corresponding rise of 3.3%, 2.6%, and 1.26%, respectively.
Among the 24 manufacturing industries, the annual monthly pay hike in precision optical and computer & telecom industries stood at 4%, which is double that of traditional industries as textile, bamboo products, furniture, pulp, and chemical products. The corresponding percentage for rubber and electric machinery industries was 1.5%, with most of the rest posting below 1%.
In July the regular monthly pay at non-agricultural sector averaged NT$36,800 (US$1,115.2), with that of the service sector at NT$38,777 (US$1,175.1) and the industrial sector at NT$34,642 (US$1,049.8).
DGBAS said that in the first seven months of the year the employed population increased by 95,000 persons from the same period of last year, the lowest of its kind in four years.
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| | ![]() | | | Taiwan's Foreign-currency Deposits Shoot Up to NT$1.999 Trillion in August
Taipei, Oct. 2, 2007 (CENS)--Taiwan's outstanding foreign-currency deposits stood at NT$1.9993 trillion (US$60.59 billion at US$1 = NT$33) at the end of August, an obvious increase of NT$44.2 billion (US$1.34 billion) from a month earlier, according to the statistics released by the central bank here.
Chrystal Shih Yen, director general at central bank's Economic Research Dept., indicated that the sharp monthly rise of forex deposits in August was mainly because of the flow of capital from the local bourse to the banking system since the market turned bearish after being influenced by the U.S. sub-prime mortgage storm.
In the same period, the outstanding deposits of securities depository accounts presented a whopping monthly fall of NT$113.2 billion (US$3.43 billion) to reach NT$1.038 trillion (US$31.46 billion). However, the outstanding time deposits edged up by NT$800 million (US$24.24 million) to NT$11.1172 trillion (US$336.89 billion).
The statistics also showed that the outstanding NT-dollar deposits in banks here by foreigners recorded a monthly increase of NT$53.2 billion (US$1.61 billion) to stand at NT$355.2 billion (US$10.76 billion) at the end of August; and in the first eight months, the increase of such deposits totaled NT$130.5 billion (US$3.95 billion), implying that foreign investors still have confidence in Taiwan's stock market.
In August the annual growth of Taiwan's three money supply indicators—M1A, M1B, and M2—all posted an upward trend for 7.26%, 8.6% and 4.25%, respectively; and the intersecting curves continued to form a "golden cross" as the growth of M1B exceeded that of M2.
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| | ![]() | | | Lead Data Leads in Supply of High-end Digital Photo Frames in Taiwan
Taipei, Oct. 2, 2007 (CENS)--After winning orders from Japan's Toshiba and adding a big-name client, Viewsonic, to its list, Lead Data Incorporation, a Taiwan-based supplier of digital photo frame, is likely to further land orders from a certain large-sized domestic electronics company, retaining its position as the largest supplier of high-end digital photo frames on the island this year, according to industry sources.
Deciding to venture into the market for digital photo frames, Viewsonic has already launched its first model DP701W4, which has high-definition 800x480 pixels and is supplied by Lead Data. With Viewsonic launching more new models, the two parties are expected to work more closely in the future.
Lead Data noted that Toshiba and Viewsonic are both new clients boasting well-known international reputation this year. However, having faced a shortfall in supply of display panels, Lead Data is still unable to fill all orders at the moment. But, the situation will probably be solved in November.
Limited by shortage of display panels, Lead Data's sales revenue for September was almost at the same level as recorded in August. With supply of related components and parts turning sufficient starting October, the company is expected to see its sales revenue move up month by month and peak at a historical high in November.
Lead Data scored net profits of NT$0.05 per share for the first half of this year, tying with CMC Magnetics Corp. as the leading suppliers by profit in the discs making sector in Taiwan during the period. With a booming season in the second half for selling consumer electronics, the company will effectively turn profitable this year, after having suffered losses for three years in a row.
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| | ![]() | | | Sunonwealth's Heat Dissipating Modules OK'ed by Carmakers in U.S., Europe
Taipei, Oct. 2, 2007 (CENS)--Sunonwealth Electric Machine Industry Co., a supplier of electrical fans and blowers in Taiwan, has been approved by American and European carmakers for its thermal-dissipation solutions for engine control units (ECUs), light-emitting diode (LED) auto lamps and automotive electronics, according to company sources.
After successfully venturing into the market for thermal dissipating modules for notebook PCs, Sunonweath, backed by its strong R&D capability and competent engineers in thermal dissipating module technology, has been developing high-end models for automotive electronics in recent six years.
Sunonwealth has launched quite a few thermal-dissipation solutions used for special car seats, ECUs, LED auto lamp and media systems on cars, auto PCs and car information systems, with most of those having been authorized by large-sized car makers in the U.S. and Europe.
Sunonwealth's Sunon-branded motor blowers feature high thermal-dissipation performance and work quietly, with optimal design on fans and modules, enabling clients to save time and cut costs in applying the products in their needs efficiently and effectively.
Sticking to rigid quality control to meet clients' demand for customized thermal-dissipation modules, Sunonwealth has spent a lot of money building sound production lines in-house and introduce the latest software and equipment. For example, the company employs an advanced device, which can measure thermal resistance at six different points by presetting configurations in simulation system so as to achieve higher precision.
Besides, with IT products featuring ultra-compactness and high performance, the company also offers Mighty Mini Fans & Blowers series and other modules with effective thermal dissipation, such as its Waturbo CPU Cooler, which can dissipate up to 130W of heat.
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