| Prime News | | ![]() | ![]() | Cabinet Suspends Further Oil-Price Hike
Taipei, Nov. 7, 2007 (CENS)--The price stabilization panel of the Executive Yuan (the Cabinet) resolved yesterday (Nov. 6) to lower the cap on accumulated gasoline-price hikes under the floating gasoline-price mechanism to 12%, down from the existing 15%, making further gasoline price hike virtually impossible in the near future, as the accumulated gasoline price hike has topped 11.75% following the latest hike on Nov. 1.
The measure will be put into practice from Dec. 1, as a result of which various gasoline prices will not exceed the existing levels even if international oil price rises further, including NT$32.2 per liter for 98 unleaded gasoline, NT$30.7 for 95 unleaded gasoline, NT$30 for 92 unleaded gasoline, and NT$27.5 for super diesel oil.
The floating gasoline price mechanism, featuring monthly price adjustment according to swings in international oil price, though, will remain intact, meaning gasoline prices would drop should international oil price decrease.
Steve Ruey-long Chen, minister of economics, remarked that it is proper to adjust the cap for gasoline-price hike now, in view of the strong reaction among local people, noting that the ministry already pointed to possibility for reviewing the cap from the outset. He admitted that rapid rise of oil prices has exceeded expectation of the ministry in designing the floating price mechanism.
Chen noted that the Ministry of Economic Affairs (MOEA) will review the existing mechanism, according to its assessment of international oil-price trend and its effect on domestic prices, people's daily life, and industries, and submit its proposal to the Executive Yuan by January 1, next year.
He, however, refused to confirm a reported statement of Vice Premier Chiou I-jen saying that gasoline prices will be capped at the current level for at least five months until the presidential election next March.
Chen pointed out that for with monthly sale of 1 billion liters of oil products, state-run CPC, Taiwan will incur loss of NT$1 billion per month for failing to reflect NT$1 per liter of oil-cost increase, amounting to NT$12 billion a year. The loss could top staggering NT$120 billion, compared with the company's paid-in capital of NT$150 billion, should the oil costs jumped NT$10 per liter.
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| | ![]() | | | Gov't to Assist Bulk-Commodity Importers in Carrying Out Long-Term Procurement Plan
Taipei, Nov. 7, 2007 (CENS)--With many bulk-commodity importers cutting their purchase amid soaring international material prices, the government will offer them loans assisting them to carry out long-term procurement plan and cut costs, so as to avoid supply shortage further deteriorating inflation, according to Steve Ruey-long Chen, economics minister.
Scaling down of import by bulk-commodity importers has sparked concern on the part of officials of the Industrial Development Bureau (IDB), under the Ministry of Economic Affairs (MOEA), about possible shortage of domestic supply, in view of shipping time and capacities. A shipload of feed, for instance, is sufficient for only two-month domestic consumption.
IDB officials, though, noted that while feed prices are still on the rise, domestic prices of salad oil, flour, and milk powder have stabilized, having fully reflected their increased import costs.
MOEA officials, though, admitted that it is actually limited for what the ministry can do in curbing domestic bulk-commodity price hikes, as restriction on dealers to reflect their increased import costs could lead to their business closures or shortage of supply. They also discounted feasibility for importers to resume unified purchase of the past to cut costs, as it constitutes an act of collusive market monopoly, in violation of the regulations of the Fair Trade Law.
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| | ![]() | | | Acer and Hon Hai Among Top-100 Multinational Enterprises
Taipei, Nov. 7, 2007 (CENS)--Of the top-100 multinational enterprises, Taiwan's Acer Inc. ranked 81st and Hon Hai 100th, according to the 2007 World Investment Report prepared by the United Nations Conference on Trade and Development (UNCTAD).
The UNCTAD report listed the top-100 multinational enterprises by surveying their investment deployments in major nations. Of these enterprises, Acer and Hon Hai are the only two Taiwan firms to have squeezed into the list by having deployment in 23 and 13 nations, respectively.
In terms of the rankings listing non-financial firms in developing nations, Tauwab saw a total of 18 Taiwanese firms squeezing into the top-100 list, only behind Hong Kong. Of domestic firms, the best performer in this field was Formosa Plastics Corp., followed by Hon Hai, Qisda Corp., Quanta Computer Inc., Taiwan Semiconductor Mfg. Co., and Acer Inc.
The UNCTAD report showed the foreign direct investments globally in 2006 grew 38.1% from a year earlier. The foreign direct investments focused on cross-border merger and acquisition in 2006. But the investment type has recently switched to oil exploration, natural gas, and metallic minerals.
Of the world's 218 nations, Taiwan ranked 31st in terms of the amount of foreign direct investment. Taiwan saw the amount of foreign direct investments reach US$7.424 billion last year, up 356% from 2005's US$1.625 billion and hitting a historic high record.
Taiwan ranked 25th in respect of overseas investments in 2007, retreating two spots from 2005. The island made overseas investments of US$7.399 billion in 2007, up 22.7% from 2005's US$6.028 billion.
The UNCTAD report showed as of 2005, Taiwan ranked 43rd with total investment of NT$1.3 trillion (US$40.12 billion) among the nations with list-topping investments in mainland China. In 2005, 35.7% of overseas investments launched by Taiwan concentrated on the mainland.
According to statistics compiled by the Investment Commission under the Ministry of Economic Affairs, Taiwan saw investments by foreigners and overseas Chinese break the US$10 billion mark in the first nine months of this year, up over 5% from the corresponding period of last year.
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| | ![]() | | | Moody's Affirms Chinatrust's Ratings on Intra-group Merger
Taipei, Nov. 7, 2007 (CENS)--Moody's Investors Service has recently affirmed Chinatrust Commercial Bank's (CTCB) C-bank financial strength rating (BFSR), A2/P-1 local and foreign currency deposit ratings, A2 senior unsecured medium-term not (MTN) rating and A3 subordinated MTN rating, all with a stable outlook. The rating action follows CTCB's announcement of its merger with Chinatrust Bills Finance Company by February 2008, subject to regulatory approval.
Meanwhile, Chinatrust Financial Holding Company's (Chinatrust FHC) foreign currency long-term issuer rating was affirmed at A3, and foreign currency senior unsecured rating at A3. The outlook for both ratings is stable.
"These ratings affirmations reflect Chinatrust Bill's small scale in business operations compared to CTCB's, and the fact that we expect a smooth integration following the merger thanks to the reasonable amount of pre-merger work already completed," said Cherry Huang, a Moody's vice president and senior analyst. Huang also noted that Chinatrust Bills, another operating subsidiary of Chinatrust FHC, is only a small player in the bills finance sector with assets and capital accounting for only 3.8% and 5.6% of CTCB's assets and capital respectively.
"The merger was originally initiated because of redundant and duplicated resource utilization at both entities, including guaranteeing/underwriting of commercial paper, trading of short-term money market instruments and long-term corporate/government bonds. In addition to cost savings on staffing, systems and administration, the merger will align both entities' books for better and more effective risk management and help avoid excessive risk-taking," said Huang.
Moody's said both Chinatrust FHC and CTCB are headquartered in Taipei. They reported assets of NT$1.759 trillion (US$54.1 billion) and NT$1.638 trillion (US$49.8 billion) respectively in the first half of 2007.
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| | ![]() | | | Taiwan Gov't Permits UMC to Fund Mainland Chinese PCB Affiliate
Taipei, Nov. 7, 2007 (CENS)--The Investment Commission of the Ministry of Economic Affairs recently issued a green light to United Microelectronics Corp.'s plan to funnel US$20 million into a mainland Chinese printed-circuit board (PCB) manufacturer held by affiliate Unimicron Technology Corp.
It is UMC's first application for Taiwan government's permission on its investment in the mainland. The silicon-foundry player was recently granted a major victory by a court over an allegation concerning its funding a mainland Chinese chipmaker named He Jian Technology.
UMC's chief financial officer, C.T. Liu, pointed out that UMC is optimistic about the mainland's PCB industry and supports Unimicron's investment strategy.
Unimicron invited UMC to put the money into the mainland Chinese PCB maker in consideration that its own investment in the manufacturer has approached government-set ceiling cap on mainland investment capital.
Vice Economic Minister Y.S. Shih pointed out that his ministry reviews any mainland-bound investment cases with usual attitude as long as they comfort to government regulations.
The ministry accused UMC of violating government regulations in the He Jian case. Industry watchers thought the ministry would give UMC trouble in reviewing the application.
Investment Commission's senior officials pointed out that since the government already allows the island's PCB makers to invest in the mainland and UMC's application has nothing unusual, the commission sees no reason for disapproving the application. They also stressed that the government did not mix the application with the He Jian case.
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| | ![]() | | | HTC Backs Google Android Handset Platform
Taipei, Nov. 7, 2007 (CENS)--Handheld device maker HTC Corp. will introduce the world's first mobile phone running on Google's Android OS, according to HTC's chief executive officer (CEO), Y.M. Chou.
However, Chou stressed that his company will stay on course to develop handsets activated by Windows Mobile OS when it is developing Android devices. He noted that Android will allow his company to expand product lines that are closer to customers' needs.
HTC is one of the 34 companies throughout the world supporting Android. Heavyweight supporters include Intel, Qualcomm, Motorola, and Spring Nextel. They form an alliance called "Open Handset Alliance."
Chou said his company began initiating Android two years ago and invested in huge research and development resources and efforts during the process. He stressed that Android integrates Google's current functions, giving users of the phones a comfortable mobile-connection experience.
Besides, Android is a free platform based on Linux and can be tailored to meet customers' needs, making it much more attractive to telecom carriers and handset makers. Similar OSs like Windows Mobile and Symbian are charge software.
Thanks to its open source advantage, Android allows handset makers to develop not only handsets but also other new applications.
Chou said his company will introduce Android phones in the second half next year at the earliest. But his company has yet decided to use which brand names on the phones.
Chou added that while his company is concentrating on Android platform, it does not mean his company will alter its pledge to Microsoft in Windows Mobile deal.
Taiwanese industry watchers pointed out along with Google's Android rollout, the competition between Google and Microsoft has expanded to mobile phone from Internet dominance.
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| | ![]() | | | CMO to Enjoy 25%-30% Large-sized Panel Shipment Growth in 2008
Taipei, Nov. 7, 2007 (CENS)--As LCD TV panel demand outstrips expectations, the global thin film transistor-liquid crystal display (TFT-LCD) market is expected to face a supply gap of 50% in 2008, according to Ho Chao-Yang, president of Taiwan's No. 2 panel supplier Chi Mei Optoelectronics Corp. (CMO).
At CMO's recent shareholder meeting, Ho claimed that CMO is expected to enjoy a 25% to 30% shipment growth next year.
The company registered after-tax earnings of over NT$13.7 billion (US$415.15 million at US$1: NT$33) in the third quarter, a record quarterly high in company history, and a profit margin of 24.2%, the highest among all counterparts in Taiwan.
Ho explained that demand from the LCD TV market outstripped CMO's original expectation, leading to better-than-expected third-quarter operation results. Such strong demand, according to the president, is expected to continue to the first quarter of 2008, a traditional off season, as many customers have been asking for advance deliveries of ordered products to meet the coming Chinese New Year sales peak early next year. So, he added, CMO's first-quarter capacity is expected to be fully filled.
CMO's TV panel shipment volume is expected to outstrip its original goal to outstrip 14 million units this year, about one million units more than original schedules, and the shipment peak would be in the fourth quarter, Ho said.
Shipments of information technology (IT) panels are also remarkable. In the third quarter, CMO's average monthly shipments of 19- and 22-inch wide-format as well as notebook PC panels all outstripped one million units.
CMO has adjusted upward its annual shipment goal of large-sized TFT-LCD panels to 51 million units from 47 million.
According to Ho, CMO's fourth-quarter TV-panel shipment would continue to grow while the average selling prices (ASP) maintained at the same level because the prices of 26- and 32-inch products are expected to hike by about 3% to offset the declining prices of 40- to 47-inch products.
Some institutional investors estimated that CMO's revenue and profits in the fourth quarter would further climb from this quarter, making it one of the few panel suppliers enjoy growths in the season.
With the newly added 7.5G capacity, CMO said that it would move production of the 42-inch full high definition (FHD) panels to the new-generation line, which would also support the production of some of the in-tight-supply 32-inch TV panels.
CMO has decided to advance equipment installation for its second 7.5G line by the end of the year and the new line is scheduled to begin mass production in the second quarter of 2008 so as to meet the strong demand in the second half of next year.
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| | ![]() | | | Falls in FPD TV Prices Slow Down: Displaybank
Taipei, Nov. 7, 2007 (CENS)--The steady decline in flat panel display (FPD) TV prices over the past two to three years has slowed down, according to Displaybank of South Korea, a display market research institute.
Data released by Displaybank showed that the quote for 32-inch LCD TVs in the third quarter declined by 6.0% from previous three months to US$848, indicating a slightly downward trend in prices.
Peter Kwon, president of Displaybank, noted that prices of 32-inch LCD TV panels are on the rise, so, the 32-inch LCD TV price declining is expected to be slower for the time being, resulting in price stabilization. Amid such mild price decline, he added, TV manufactures are expected to take advantage of such good opportunity to maximize their operating profits.
Quoting Displaybank's FPD TV pricing trend report, the president added that the average retail prices of 40-inch and 42-inch LCD TVs were US$1,435 and US$1,486, respectively, in the third quarter, down only 2.5% from previous quarter and demonstrating a stabilizing trend of the retail prices of such two sizes TVs.
The prices for 42-inch high-definition (HD) PDP TVs have also fluctuated less than 1% in the third quarter, Displaybank's data showed, with the average retail price being $1,279. The prices of 42-inch HD PDP TVs seem to have entered a stable phase, Kwon said, as the quarter-on-quarter decrease of 50-inch PDP TV prices saw a negligible ratio of only 2.7% in the third quarter.
Competition between LCD TVs and PDP TVs are expected to enter another phase from now on, said Kwon. LCD TV manufacturers are proceeding with a business for super large size TV models with 52-inch and 58-inch screens in conjunction with panel suppliers' aggressive launches large-size products with their eighth-generation (8G) panel production lines. Such trend, according to the president, made PDP firms unable to avoid full-fledged competitions in all size categories after they launched 32-inch PDP TVs.
Therefore, Kwon explained, the image quality, brand image, and prices rather than the device type (LCD or PDP TVs) would become key factors to attract consumers to purchase a FPD TV.
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| | ![]() | | | Taiwan's Passenger Airlines See Mixed Performance in Q3
Taipei, Nov. 7, 2007 (CENS)--Taiwan's leading passenger airline companies showed mixed performance in the third quarter of this year, with China Airlines raking in profits of NT$1.425 billion (US$43.18 million at US$1 = NT$33) and Eva Airways scoring NT$437 million (US$13.24 million) while Far East Air Transport suffered a loss of NT$130 million (US$3.94 million).
With good performance in the third quarter, China Airlines may see its profitability turn black from red for the full year. In August alone, the company boasted record monthly high revenue of NT$11.849 billion (US$359.06 million) for after-tax profits of NT$775 million (US$23.48 million) in the third quarter as a result.
In the first nine months, China Airlines accumulated profits of NT$2.472 billion (US$74.91 million), with after-tax loss shrinking to NT$93.17 million (US$2.82 million) or negative earnings per share (EPS) of NT$0.02 (US$0.0006).
In the third quarter, Eva Airways gained profits of NT$437 million (US$13.24 million) from its flight operations and its total pretax profits expanded to NT$831 million (US$25.18 million). However, the company's operations in the first three quarters suffered a net loss of NT$1.572 billion (US$47.64 million), with after-tax loss of NT$896 million (US$27.15 million) or negative EPS of NT$0.23 (US$0.007).
In the third quarter alone, Eva Airways saw a slight annual rise of 3% in passenger flights, with passenger loading rate hitting a quarterly record high of 83%. In the same quarter, the company racked up non-operating incomes of NT$400 million (US$12.12 million).
Far East Air experienced a net loss of NT$130 million (US$3.94 million) in the third quarter with after-tax loss ballooning to NT$1.884 billion (US$57.09 million). In Jan.-Sept. period, the company suffered a net loss of NT$377 million (US$11.42 million), with after-tax loss growing to NT$2.196 billion (US$66.55 million) or negative EPS of NT$3.91 (US$0.12).
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| | ![]() | | | Delay to Set Up Artistic Glass District May Drive Glass Makers to China
Taipei, Nov. 7, 2007 (CENS)--Domestic glass manufacturer in central Taiwan recently complained about the government's obvious delay in the establishment of a special artistic glass district in Changhua Coastal Industrial Zone, which is also located in central Taiwan.
Shortly after returning from China, Jackson Lin, the promoter of the said district and also general manager of Taiwan Mirror Glass Enterprise Co. (TMG), indicated that the city authorities of both Fujian Province and Jiangsu Province have already contacted him, expressing great interest to have Taiwan glass makers to set up an artistic glass industrial zone in their cities, with each planning to offer a site more than 13 hectares for such zone.
Lin emphasized that Taiwan is now still the first choice for the said district and that there are interested suppliers planning to move in. Today only 13 domestic glass manufacturers still plan to set up shop in the projected district, including Fu Hwa Mirror Co., Yen-Chi Artistic Glass Co., Euro American Industrial Corp., Kuan Mei Plastic Co., and Shuo Way Enterprises Co. However, they are gradually losing patience.
Lin pointed out that the proposal for the establishment of the artistic glass district had been submitted to the related authority about three and half years ago. Ministry of Economic Affairs (MOEA) declared in May this year to budget NT$600 million (US$18.18 million at US$1 = NT$33) for the construction of the district and meanwhile have set the price of the prospective leased land inside the district at NT$218 (US$6.61) per ping (1 ping = 36 sq/ft).
However, so far MOEA has not taken any further action to break ground for the construction, with rumors simmering that the rental for the land would go up, which is worrying its prospective tenants, Lin complained. The scenario suggests that the government may have reneged on its promise to set up such a district.
Today Taiwan is the world's fifth largest glass producer, with a total of 2,400 companies in the line that generate products worth of around NT$120 billion (US$3.64 billion) per year.
In recent years Taiwan's glass industry has faced harsh competition from China and Vietnam. So, Lin urged domestic glass manufacturers to upgrade themselves by fabricating more value-added artistic glass products and jointly explore international markets. He believed that it's time now to set up a special artistic glass area for domestic makers to facilitate mutual cooperation in the procurement of materials and sharing of marketing information.
As one of the leading glass product producers in Taiwan, TMG is now IKEA's largest glass supplier in Asia. Last year the company's revenues stood at NT$2.12 billion (US$64.24 million) and the figure in the first nine months of this year already reached NT$1.95 billion (US$59.09 million). Recently the company has received orders worth of US$1 million from furniture and glass factories in Italy, so it is expected to see a growth of more than 15% in revenues for the full year.
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| | ![]() | | | LiteOn Flooded by Orders Till Q2 of 2008
Taipei, Nov. 7, 2007 (CENS)--With strong need for backlights, LiteOn Technology Corp., a Taiwanese supplier of light-emitting diodes (LEDs), has seen an influx of orders to last till the second quarter of next year, according to Teng Kuang-chung, CEO of the firm.
LiteOn plans to boost its production capacity in its plant in Tianjin by three folds and expects the newly added capacity to be operational in the first quarter of next year. LiteOn's LED business division recorded a single-month high in revenues of NT$1.05 billion for this October.
LiteOn's acquisition on Leotek Electronics Corp., a Taiwan-based supplier of LED module, is expected to contribute an additional NT$1 billion a year to its annual revenue, while its buyout of Avago's infrared business unit can achieve revenue of US$50 million at least, according to institutional investors. Besides, With an estimated growth of more than 30% in its LED sales in 2008, LiteOn, which just projected its annual revenue of the products to break NT$10 billion this year, is very likely to further push the figure up to NT$15 billion, or even NT$18 billion, for next year.
As a leading supplier of LEDs in Taiwan, LiteOn, with 5% sales generated from its LED business, rarely makes comments on the prospect of the sector, but its CEO Teng recently said that LED is worth investing in and the sector will stay upbeat for at least 30 years.
Eyeing on a promising future of the LED sector, LiteOn has deployed its business operations throughout the sector over past five years. Teng said that LiteOn has acquired key technologies for making LEDs from large-sized international counterparts, including packaging process for white LEDs from U.S.'s Cree, and technology licenses from Japans' Toyoda Gosei and Germany-headquartered Osram.
With a seat on the board of the LED chip supplier Epistar Corp, and a client Philips Lumileds, LiteOn decided to acquire downstream LED packaging companies, including aforementioned Leotek and Avago's infrared business unit. Such moves have turned LiteOn's LED business division into the most dedicated production structure among downstream LED packaging companies on the island.
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| | ![]() | | | Mosel Starts Setting Up Production Line for 8-inch Wafers
Taipei, Nov. 7, 2007 (CENS)--Mosel Vitelic Inc., a Taiwan-based supplier of memory products, has officially started building its 8-inch wafer plant to handle contract production, according to company sources.
The new plant is scheduled to be operational next year, with monthly production capacity of 10,000 wafers and production value worth up to NT$2.5-3 billion a year. It is reported that Mosel has already moved to contact two large-sized clients of integrated device manufacturers, namely STMicroelectronics (STM) and NXP Semiconductors (XNP), for contract orders.
Meanwhile, Mosel has begun setting up its second production line for solar cells, which will be activated as soon as in the first quarter of next year. Backed by the two new lines, the company is expected to challenge annual revenue of more than NT$10 billion next year.
To offset investment losses posted by its affiliate ProMOS Technologies Inc. in the second half of this year, Mosel has seen its net profits diminish in the first half. But, thanks to increasing operation incomes and decreasing losses in reinvested business in the third quarter, Mosel reported net profits of NT$0.56 per share for the first three quarters of the year.
With the price of dynamic random access memory (DRAM) turning stable and significant returns from its effort in solar cell business and contract production, Mosel is expected to achieve better business operations next year.
In fact, Mosel has been gradually withdrawing from DRAM business and turning to producing 8-inch wafers, solar cells and products based on radio frequency identification (RFID) technology, in a bid to infuse its operations with new momentum. Chen Min-liang, chairman of Mosel, said that building own 8-inch wafer plant is Mosel's expected strategy, with STM and XNP both being potential clients.
At the moment, Mosel has only one 6-inch wafer plant, which specializes in turning out power metal-oxide-semiconductor field-effect transistors (MOSFETs) and integrated circuits for power management, with capacity of nearly 60,000 units per month. In the third quarter of this year, the plant ran at full capacity and saw its supply still lagging behind orders, which drove Mosel to directly build production lines for 8-inch wafers.
Initially, Mosel produced power MOSEFTs through 0.2-micrometer process on trial basis in ProMos's existing 8-inch wafer plant; after which Mosel officially moved to start setting up production lines for 8-inch wafers, and has already sent samples to STM and XNP for certification, according to industry sources.
On the other hand, Mosel's production line for solar cells is fully booked at present, and the company has actively planned to set up its second line with capacity of 30MW. The company is also studying the feasibility of building the third and fourth lines. Chen noted that the newly added line will start trial production as soon as the first quarter next year.
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