| Prime News | | ![]() | ![]() | Oct. CPI Growth Hits 13-Year High
Taipei, Nov. 6, 2007 (CENS)--Driven by soaring foodstuff prices, Taiwan's consumer price index (CPI) in October shot up 5.34% year-on-year, a 13-year high, reported the Directorate General of Budget, Accounting and Statistics (DGBAS) yesterday (Nov. 5).
After excluding the seasonal factors of produce and fish/meat prices, the core CPI, which reflects long-term inflationary trend, jumped 2.27% year-on-year, the highest since February 2001, as well as the fourth straight month for the index to score over 1% growth.
Wu Chung-shu, research fellow at the Institute of Economics, the Academia Sinica, the nation's foremost academic institution, pointed out that pushed by the force from the supply side, inflationary situation next year may be even daunting, adding that the CPI growth will stay above 2% by next August.
DGBAS reported that due to string of typhoons and soaring international grain prices, foodstuff price index in October leapt 14.86% year-on-year, contributing 3.97 percentage points to the overall CPI index growth. DGBAS expected the CPI index growth to drop in November, following stabilization of vegetable prices, which soared 78.6% year-on-year in October.
Wu Chao-min, section chief of the DGBAS's Third Bureau, also attributed the sharp foodstuff price growth in October to deterred effect of skyrocketing international grain prices, with wheat price already rising 136% and both corn and soybean prices jumping 70% so far this year. Taiwan relies on import for supply of such grains.
Consumers are not the only victim. Wu Chao-min reported that export price index, in terms of NT dollars, inched up 0.75% in October year-on-year, when import price index jumped 8.85%, reflecting inability of exporters to pass on their higher costs to buyers.
In the wake of the publication of the October CPI index growth, the Executive Yuan (the Cabinet) announced yesterday freezing further price hikes for domestic gasoline prices. Chen Ching-chun, secretary general of the Executive Yuan, noted that with profits of state-run CPC, Taiwan already hitting NT$20.2 billion, higher than its yearly target, further gasoline-price hikes under the existing floating price mechanism, which adjusts gasoline prices a month in line with swings in international oil prices, will be suspended.
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| | ![]() | | | European Chamber Proposes Remedies for Taiwan's Sluggish Economy
Taipei, Nov. 6, 2007 (CENS)--The European Chamber of Commerce Taipei issued its annual paper on Taiwan's economic environment yesterday (Nov. 5), offering a suggested roadmap containing 10 remedies to reinvigorate Taiwan's sluggish economy, which has dropped out of the leading group of leading economies in the region.
In the paper, dubbed "Time to Act! Roadmap for the New President, the European Chamber suggests first to immediately normalize cross-Taiwan Strait economic relations, which it says, along with inconsistent economic policies, is one of the two major impediments to the island's economic development.
Helmut Bolt, co-chairman of the auto-industry committee of the chamber, noted that allowance of direct cross-Taiwan Strait transportation link and Chinese capital into Taiwan will boost Taiwan's economic growth rate by at least 3-3.5 percentage points.
Ralf Sheller, chairman of European Chamber, pointed out that the existing China-related policies have discounted effects of many of Taiwanese government's economic measures, such as the free-trade harbor.
European Chamber also urged the Taiwanese government to deregulate the financial services sector, develop a competitive taxation and tax incentive climate, open the public procurement market and upgrade infrastructure, accelerate the development of services and other related industries, secure a sufficient supply of skilled labor for high-tech and service industries, provide clear direction and leadership in development policies for new industries, step up Intellectual Property Rights protection, and curb carbon emissions and energy efficiency.
The chamber lamented that Taiwan has dropped out of the group of leading economies in the region - South Korea, Hong Kong and Singapore - while others like China, India and Vietnam are catching up fast. Taiwan's competitiveness is falling behind its former Asian Tiger rivals in creating a more globalized business environment and in opening the market. Among these rival economies, Taiwan has the lowest GDP growth, the lowest GNP per capita; the lowest number of IPOs, the weakest growth in exports of ICT products; the lowest number of inbound tourists, and has the heaviest tax burdens for its companies and citizens.
Also the level of consumer confidence is among the lowest in region, according to the Chamber. ECCT member companies in an increasing number of businesses - including financial services, retail, travel, hospitality, and even higher-end luxury goods - are complaining about low consumer spending.
Ralf Scheller urged the Taiwanese government to take vigorous actions without hesitation, especially in view of the adverse trend for Taiwan's economic environment, including the formation of the ASEAN free-trade zone and the signing of free-trade agreement between South Korea and the U.S.
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| | ![]() | | | Universal Cement Mulls Allying With Taiwan Cement to Tap Mainland China Market
Taipei, Nov. 6, 2007 (CENS)--Universal Cement Corp., one of Taiwan's listed cement firms, has recently resolved to speed up investments in mainland China. The company currently has a production base in Longmen of Huizhou of Guangdong Province.
It is expected the Huizhou Development Zone will demand 12 million metric tons of cement in the five years to come.
Universal president Lee Kuo-tung said his company is now building a second kiln in the Longmen plant which is expected to be completed in 2010. With the addition of the second kiln, the company will see the plant boast an annual production capacity of three million metric tons of cement.
Universal Cement said it would seek a strategic alliance with Taiwan Cement Corp.'s Yingde plant in a bid to tap downstream ready mixed concrete industry.
Lee noted the demand for cement has been increasing in the Huizhou Development Zone over the past several years. The zone demanded only four million metric tons of cement in the past two years and the amount will be expected to grow to six million metric tons this year. The annual demand will jump to 12 million metric tons in the next five years, almost close to Taiwan's annual domestic demand.
Lee said the Huizhou plant will have an annual production capacity of three million metric tons of cement in 2010 after the completion of the second kiln, triple that of Universal's parent plant in Taiwan. With the addition of the second kiln, the Huizhou plant will reach economy of scale, allowing it to reduce production costs.
Thanks to booming demand, the prices for cement in the Guangdong province have been on the rise over the past several months. For instance, the quoting price for the P.042.5-type cement has jumped 27% to RMB355 (US$47.33) per metric ton at the end of October from RMB280 (US$8.64) quoted in the beginning of this year. It is expected the cement price will continue to rise till the end of this year if demand doesn't wane.
Lee predicted his company would turn profitable in 2008. He said the Huizhou area will see production capacity decrease by 4.2 million metric tons in the next three years because of mainland authority's endeavor to slash production of inferior-quality cement, prompting Universal to speed up production of high-quality cement in the mainland.
In addition to the increase in cement production, Universal said it would invest US$12 million to set up five ready-mixed concrete plants in Huizhou. The company estimated its total annual production capacity of ready-mixed concrete in Huizhou will amount to two million cubic meters in 2010.
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| | ![]() | | | Acer Racks Up 58% Growth in PC Sales in Q3
Taipei, Nov. 6, 2007 (CENS)--Acer Inc. beat out Lenovo Group as the world's third-largest PC (personal computer) producer in the third quarter of this year, according to a survey released by the world-renowned industry analyst Gartner.
In terms of annual growth, Acer garnered a 58% year-on-year growth in sales of PCs as the world's fastest-growing PC producer among the world's top-five PC concerns.
But another survey by the International Data Corporation (IDC) showed Acer still as the world's fourth-largest PC producer in the third quarter of this year. The IDC's survey showed Acer saw sales of PCs grow 59.2% year-on-year with an 8.1% market share globally in that quarter.
IDC said Hewlett Packard Corp. was the world's largest producer of PCs by snatching a 33% growth in sales of PCs with a 19.6% market share globally in the third quarter of this year. Dell Computer Inc. was the world's second-largest PC producer. The gap in global market share between Hewlett Packard and Dell expanded to 4.4 percentage points from the previous quarter's 3.2 percentage points.
IDC's tallies showed the world shipments of PCs amounted to 66.9 million units in the third quarter of this year, up 15.5% because of the strong demand for laptop computers and from the business market. On the other hand, Gartner's tallies showed the world shipments of PCs reached 68.46 million units in the third quarter of this year, up 14.4% year-on-year from 59.82 million units.
Hewlett Packard has seen its shipments of PCs grow over 30% in each of the second and third quarters of this year. IDC ascribed the company's substantial growth to the outstanding performance of its retailers and distributors worldwide. Despite its strong performance in Europe, the Middle, Africa and Asia, Hewlett Packard didn't see higher sales in the U.S. and Japanese markets in the third quarter of this year.
Dell saw shipments of PCs increase by 10.2 million units with an annual growth of 3.8% in the third quarter of this year. The company ranked second with a 15.2% global market share in third quarter, reversing its downturn sales over the past three quarters.
IDC's tallies showed Lenovo was the world's third-largest PC brand with shipments growing 22.9% and global market share up 8.2% annually in the third quarter of this year. With strong performance in Europe, the Middle East, Africa and Asia, Acer saw shipments increase 59.2% with an 8.1% market share globally in the third quarter of this year.
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| | ![]() | | | TSMC Outshines UMC in Leading-Edge Process Race
Taipei, Nov. 6, 2007 (CENS)--While Taiwan Semiconductor Manufacturing Co. (TSMC) began putting 45-nanometer process into volume production in September this year and will introduce 40-nm process early next year, United Microelectronics Corp. (UMC) projects revenue from 45-nm process to come late next year.
Industry watchers pointed out that although the top two silicon-foundry suppliers will cut capital expenditures next year, they will not slow down development pace of leading-edge process technologies.
According to TSMC's process-development roadmap, the company had begun planning research and development of 32-nm process while it was developing volume production technology for 45-nm process.
By advancing rivals in leading-edge process, TSMC has widened competition distance with its rivals, industry watchers note.
Last quarter, 65-nm process account for 7% of TSMC's revenue, up from 3% registered a quarter earlier. Industry watchers estimated the proportion will likely surge further throughout this quarter.
TSMC began using 45-nm process to make Qualcomm's chips in November this year, becoming first chipmaker to offer commercialized 45-nm process. The foundry giant plans to begin offering 40-nm process early next year. Afterward, the company will introduce 32-nm low-power process in the fourth quarter 2009 and begin developing 22-nm process.
TSMC executives pointed out that the company will offer 45-nm and 65-nm customers FBA, lead-free, and CSP testing and packaging solutions to help them accelerate new products' time-to-market.
UMC depended on 90-nm process and 65-nm process for 25% and 4% of its revenue, respectively, last quarter alone. UMC Chief Executive Officer Jackson Hu pointed out that his company is producing 20 65-nm products and will ramp up the output in the second half next year. Its 45-nmporcess has been applied to first product at its Fab12A 300-mm factory in the Southern Taiwan Science Park and will begin contributing insignificant revenue in the second half next year.
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| | ![]() | | | Chunghwa Picture Tube, Giantplus Enter Into Alliance on LCD Business
Taipei, Nov. 6, 2007 (CENS)--Chunghwa Picture Tube Co., Ltd. will pay Giantplus Technology Co., Ltd. NT$4.5 billion (US$136 million at US$1:NT$33) for one third of Giantplu share in a private placement in return for Giantplus' pledge to buy its third-generation TFT-LCD factory for NT$6.5 billion (US$196 million at US$1:NT$33) after they recently closed an alliance deal.
Industry watchers pointed out Chunghwa will make around NT$2.97 billion (US$90 million) from the deal while its partner will become one of the world's top three suppliers of small-sized LCD panels in two years.
The transaction is expected to be completed in January next year.
Currently, Wintek Corp., Samsung and Sharp are the world's top three suppliers of mid-sized and small-sized LCD panels, leaving Giantplus far behind.
Industry watchers pointed out that thanks to the partnership with Chunghwa, Giantplus will acquire enough TFT-LCD production capacity. Besides, resources from the Sunplus Group, which now holds a 33% stake in Giantplus, will make Giantplus stronger.
Giantplus executives pointed out that the deal allows their company to acquire not only Chunghwa's third-generation factory but also strategic capacities supplied by Chunghwa's fourth-generation and 4.5-generation factories. Sufficient capacity supplies will help Giantplus bring down costs and become competitive.
Chunghwa executives noted that Giantplus is their company's biggest customer of small-sized panels and its demand has already surpassed its third-generation factory's output. But they stressed Giantplus' demands will not strain their company's supplies because their cooperation will expand to fourth-generation and 4.5-generation factories.
Giantplus started out with production of TN, STN, and CSTN panels, but TFT-LCD panels have accounted for 57% of the firm's revenue so far this year. They estimated the proportion will likely cross 60% at yearend.
Although Giantplus has evolved into a TFT-LCD manufacturer, it has failed to win orders from big-name buyers due to lack of front-end manufacturing technology. The company's executives pointed out their company decided to team up with Chunghwa after two years of production cooperation.
Giantplus, which is currently capitalized at NT$2.4 billion (US$72 million), will launch a private placement to issue 150 million shares to hike its capitalization to NT$3.7 billion (US$112 million). Chunghwa will subscribe to 128 million shares for NT$4.5 billion.
Once Chungwa acquires that many of Giantplus shares, Sunplus' ownership of the small-sized LCD maker will drop to 21%.
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| | ![]() | | | Sharp Regains No. 1 in North American LCD TV Market in Q3
Taipei, Nov. 6, 2007 (CENS)--The North American TV brand sales rankings were reshuffled again in the third quarter with Sharp on top for LCD TVs for the first time since the first quarter of 2005, according to DisplaySearch, the worldwide leader in flat panel display (FPD) market research and consulting.
Sharp led the North American LCD TV market with an 11.3% share, rising from No. 3 in the second quarter, 65% from previous quarter (Q/Q), and 88% from the same period of last year (Y/Y).
DisplaySearch attributed Sharp's smooth sales to several factors. First, Sharp's rapidly growing in-house panel capacity—Sharp had the fastest sequential thin film transistor-liquid crystal display (TFT-LCD) panel supply growth of any panel supplier, up 36% Q/Q, as it continues to upgrade its new eighth-generation (8G) panel plant. Second, the growing LCD TV focus—Sharp's worldwide LCD TV panel shipments rose from 56% to 64% of its total large-sized TFT-LCD volume, displacing its share of notebook PCs.
Third, Sharp's significant emphasis on smaller sizes where demand is strong and supply is tight—Sharp's under-32-inch TV set volume rose 77% Q/Q, rising to 40% of its total third-quarter shipments (Sharp was No. 1 in 19-inch and 26-inch and also led at 52-inch segments). And the fourth, the increased emphasis on the North American LCD TV market—North American absorption of Sharp's worldwide third-quarter LCD TV volume rose from 24% to 34%.
According DisplaySearch, the original No. 1 Vizio (made by Taiwan-based AmTRAN Technology, Co. Ltd.) fell to No. 2 despite a 334% Y/Y growth in the third quarter, because it had the slowest Q/Q growth of the top-five. The research firm attributed Vizio's slower third-quarter sequential growth to the less seasonal nature of its primary sales channel: the warehouse club channel. However, Vizio was No. 1 in 32-inch and -larger volume and in LCD HDTV volume. It also led the 32-, 37- and 42- markets.
Samsung fell from No. 2 to No. 3 in the third quarter despite 33% Q/Q and 79% Y/Y growth. Sony had the fastest Q/Q growth of the top-five brands—up 108% Q/Q and 84% Y/Y—as it rolled out a number of compelling new products later this year than last year, while also targeting mass merchants like Wal-Mart through the new M series. As a result, Sony's unit ranking rose from No. 7 to No. 4, and it jumped from No. 3 to No. 1 in revenues.
Preliminary totals for LCD TVs rose 34% Q/Q and 82% Y/Y to a new record high of 6.6 million units, DisplaySearch said. LCD TVs rose to 88% of flat panel display (FPD) TV volume, compared with 78% in the same period of 2006.
In plasma TVs, Panasonic continued to lead with a 30% share on 11% Q/Q growth. However, on a Y/Y basis, Panasonic's volume was down 28% after it shipped an excessive number of plasma TVs into North America a year ago when the European market stalled after the World Cup, DisplaySearch said. | |
| | ![]() | | | LTPS Revenue to Top US$7 B. This Year: DisplaySearch
Taipei, Nov. 6, 2007 (CENS)--The global revenue of low temperature poly-silicon (LTPS) thin film transistor-liquid crystal display (TFT-LCD) panel is expected to reach US$7 billion to outstrip US$9.4 billion by 2011, according to DisplaySearch, the worldwide leader in flat panel display (FPD) market research and consulting.
Currently, the top-three LTPS TFT-LCD panel suppliers are Sharp (with a market share of 28% in terms of area), Toshiba Matsushita Display Technology Co., Ltd. (TMD, 26%) of Japan, and TPO Displays Corp. of Taiwan (14%). The No. 4 and No. 5 Sony and Epson own market shares of 10% and 5%, respectively.
According to DisplaySearch, the demands for LTPS panels have been increasing thanks to the increasing popularity in small-medium LCD application markets such as cellphones and digital cameras, while the latest organic light-emit diode (OLED) TV panels have gradually turned to use LTPS as the active matrix back-plate.
DisplaySearch's data showed that this year's global LTPS revenue is expected to reach US$7 billion, accounting for 8% of that of all TFT-LCD panels. The research firms said that LTPS products feature many advantages, such as higher resolution, more precise display, higher brightness, better power efficiency etc., which have been driving such type of panels to get increasing popularity in especially handheld devices stressing power-saving, higher resolution, and better picture dynamic performance.
However, David Hsieh, president of DisplaySearch Taiwan Office and vice president, DisplaySearch Greater China, pointed out that there are some challenges ahead for LTPS panels to gain higher market shares, including that most cellphone and digital-camera makers would require LTPS panels to be priced similarly as Si counterparts, and LTPS is facing some difficulties with raising non-defect ratios during production because it has to utilize more photo masks.
To meet the market demand, DisplaySearch said, some companies are constructing new LTPS TFT-LCD panel plants while some panel suppliers have converted or plans to convert their under-fourth-generation (4G) panel production lines to produce LTPS products. Some examples include the 3.5G lines of Taiwan's top-two TFT-LCD panel makers AU Optronics Corp. (AUO) and Chi Mei Optronics (CMO), 4.5G lines of Samsung Electronics and LG.Philips LCD Co., Ltd. (LPL) of South Korea, while many Japanese players have been transferring their under-4G capacities to LTPS such as Sharp, Toshiba, TMD, Epson, Sony, etc.
Sharp and TMD are scheduled to set up new LTPS panel plants to further expand their capacities of such hot products, while Samsung SDI of South Korea also plans to set up a LTPS panel facility focusing on cellphone application market. | |
| | ![]() | | | Taiwan's Manufacturing, Service Industries See Better Business Index in September: TIER
Taipei, Nov. 6, 2007 (CENS)--Taiwan Institute of Economic Research (TIER), one of Taiwan's major think tanks, recently announced that Taiwan's business monitoring index for the manufacturing sector rose by 1.61 points to hit a three-year high of 123.21 points in September.
The rise was mainly because of robust export that helped the manufacturing industry enter the hot season. In the same month, the monitoring index for the service sector also trended upward by inching up 0.45 points to 115.27 points.
TIER indicated that both manufacturing and service industries are worried about the fluctuation of raw material prices in the international market, which would not only influence the island's manufacturing cost and export, but also impact the purchasing power in the local market.
It predicted that the high oil prices would slow down the global economy next year; yet, the strong demand of emerging economies might encourage manufacturing production and investment, which would help stabilize the world's economy.
A survey done by TIER showed that 26.3% of the polled in manufacturing industry anticipated a better economic climate in the next six months and 18.6% expected a worse one. Those who believed that the climate would remain unchanged totaled 55.1%.
The industries that felt pessimistic about the future economic climate included food, electric home appliances, and motorcycle parts; while those forecasted optimism included cement, telecommunication equipment, video & audio electronic parts, information storage and processing equipment, electronic parts, auto manufacturing, bicycle parts, and precision machinery.
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| | ![]() | | | Soaring Oil Price May Push Taiwan's CPI Growth Up to 4% in Q4
Taipei, Nov. 6, 2007 (CENS)--The Cabinet-level Council for Economic Planning and Development (CEPD) predicted that the annual growth of Taiwan's consumer price index (CPI) might jump to above 4% in the fourth quarter of this year if the price of West Texas Intermediate (WTI) crude oil soars to US$100 per barrel in November or December of the year.
Feeling the pressure of commodity price hike that may cause inflation, the government here has recently formed a special taskforce to work on ways to deal with market fluctuations.
CEPD chairperson Ho Mei-yueh indicated that if WTI crude oil price in November and December remains at US$85 per barrel as in October, the annual growth of CPI would fall between 3.22% and 3.58%. If the oil price shoots up to US$100 in the said two months, with the government refraining from freezing oil prices in the domestic market, then CPI might see a sharp rise of 4.02% in the fourth quarter.
Even if the government freezes the oil prices, the CPI might still post annual growth at 3.58%-3.98% in the fourth quarter, Ho foresaw. The projected percentage is much higher than that forecast by the Cabinet-level Directorate General Budget, Accounting and Statistics (DGBAS).
CEPD further estimated that the soaring international crude oil prices would help boost up Taiwan's CPI by 1.48%-1.68% for the full year, which is also higher than the corresponding 1.48% announced earlier by DGBAS.
Taiwan's CPI witnessed a slight annual growth of 0.9% in the first three quarters of this year. It is acceptable, Ho said, if the percentage expands to within 2% for the entire year.
To keep an eye on the volatile market, the government directed related units to strictly monitor the supplies and demand of commodities in the domestic market, including wheat, corn, steel, and gravel. The judiciary emphasized that any party or store that purposely hoard commodities or sharply raise prices would be severely punished.
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| | ![]() | | | Arima Outstrips Compal Communications in October Revenue
Taipei, Nov. 6, 2007 (CENS)--With its shipment exceeding 1.6 million mobile phones in October, Arima Communications Corp. saw its sales revenue hit a new high of NT$3.564 billion for the month, slightly higher than Compal Communications Inc.'s NT$3.463 billion, which, in turn, was down 22% from a month earlier, according to company sources.
This is the first time in two years that Compal Communications, a leading Taiwanese ODM (original design manufacturing) supplier of mobile phones, has lagged behind Arima in single-month revenues.
Aided by increasing orders from Sony Ericsson and O2, respectively, for T250 series mobile phones and Flame smartphones, as well as ongoing shipment to E-Ten Information Systems Co. and i-mate, Arima delivered over one million mobile phones and scored sales revenue of nearly NT$2.7 billion in September.
In October, Arima further pushed up the figures, respectively, to 1.61 million units and a two-year high of NT$3.564 billion, attaining aggregate revenue of NT$14.97 billion for the first 10 months of this year.
In fact, Arima suffered lackluster sales performance in the first eight months of the year, reporting net loss of NT$1.31 per share for period. However, the company has turned profitable since September, and projects its shipment of handsets to reach about four million units for the fourth quarter.
Meanwhile, Compal Communications reported October revenue of NT$3.463 billion, dropping 41% from a year earlier and 22% from September. Based on past experience, the company expects its shipment to peak in December.
Affected by dwindling orders from Motorola this year, Compal Communications has seen its sales revenue edge down quarter by quarter, and its expects revenue for the fourth quarter to stay at the same level as posted in the third quarter. It reported aggregate revenues of NT$41.72 billion for the first 10 months of the year, down 29% from a year earlier.
Despite a sharp drop in sales revenues, Compal Communications has posted significant investment gains, thus scoring net profits of NT$1.69 per share for the third quarter, and NT$5.5 for the first three quarters of the year.
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| | ![]() | | | Taiwan's LED Makers Moving to Tap Mainland Chinese Market
Taipei, Nov. 6, 2007 (CENS)--In light of huge business potential in the Chinese market for light-emitting diodes (LEDs), Taiwan's LED makers are actively moving to deploy their operations in the market by joining forces with local counterparts, according to industry sources.
Among Taiwan's major LED makers, Everlight Electronics Co., Ltd. has already allied itself with China's SVA Group to penetrate the Chinese market for LED advertising lights, LED streetlights and LED illumination, while Epistar Corp. and I-Chiun Precision Industry Co., Ltd. have jointly worked with China's LED packaging firms to turn out LED streetlights and LED auto lamps.
Also, LiteOn Technology Corp. is to bring its newly acquired LED module maker Leotek Electronics Corp. to China to specialize in making LED streetlights and LED traffic lights. Bright LED Electronics Corp. is cooperating with at least three Chinese counterparts to develop LED street lamps.
Everlight revealed that it has allied with China's largest panel maker SVA Group, in consideration that demand for LED applications in China has been growing gradually and that Taiwanese makers can supply LED backlights for mainland Chinese suppliers.
The two parties will jointly develop LED illumination systems, LED streetlights and LED advertising lights. Besides, Everlight plans to expand its capacity in China to meet increasing demand of its new partner in the future.
In terms of sales opportunity for Christmas lights, Robert Yeh, chairman of Everlight, said that at the moment, the global demand for Christmas lights reaches around 300 million sets a year, which require a total of 30 billion units of white LEDs. However, a penetration rate of LED Christmas lights is only 2%, because the price is three times that of conventional models. This makes Everlight consider moving to tap the Chinese market for the products in the future.
On the other hand, Teng Kuang-chung, CEO of LiteOn, noted that Leotek has succeeded in making well-received LED streetlights and traffic lights in the U.S. market, and hence LiteOn wants to guide the company to penetrate the Chinese market with its platforms already built there for many years. In addition, LiteOn has ventured into development of solar energy and will apply the technology onto LED streetlights, providing energy-saving solutions.
To quickly tap the Chinese market, Epistar last year acquired Epitech Technology Corp. and Highlink Technology Corp., as Epitech has built integrated distribution channels in the market. Besides, Epistar and I-Chiun have joined forces with China's LED packaging companies to develop LED auto lamps and streetlights, with Epistar providing chips and I-Chiun supplying cable guides.
Bright LED also benefits from business potential in the Chinese market for LED streetlights. The company has worked with at least three local manufacturers to develop related products meeting China's regulations, and already won two orders worth several tens of million New Taiwan dollars.
The company will further receive some orders by the end of this year to make its fourth-quarter revenues hit a new quarterly high. The firm expects LED streetlights to account for 10% of its total sales in 2008.
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| | ![]() | | | EMO Hannover 2007 Shorter in Duration but Even More Popular Than Last
By BEN SHEN
The six-day EMO Hannover 2007 exhibition held at the Messe Hannover of Germany, the world's largest machine-tool show, ended on Sept. 22 amid a spate of accolades as well as having drawn more exhibitors, visitors and global presence compared to the last session held two years ago.
The European Committee for Cooperation in the Machine Tool Industry (CECIMO), organizer of the EMO Hannover 2007, said approximately 166,000 visitors flocked to the event to purchase sophisticated machine tools, place orders, and learn about the latest developments in metalworking. This represented an increase of 4% over the previous event when EMO still ran for a total of eight days. Even the number of exhibitors—2,118 exhibitors from 42 different nations—was up 5%, and the floor space occupied by exhibitors was also up by 12%, reaching a total of 180,000 net square meters.
The CECIMO said the EMO Hannover 2007 gave the international machine-tool sector an enormous shot in the arm. According to the official exhibitor survey, this year's EMO show generated orders placed worth some four billion euros. More than half of all exhibitors were anticipating a positive influence on subsequent German and European sales.
The EMO was initiated in 1950 by CECIMO, an international association jointly formed by the machine-tool industries of European member nations. The CECIMO is made up of national machine tool organizations from four countries and represents all major manufacturers in the industry in Europe. The 1,300 or so member companies in CECIMO currently turn out 46% of the global machine tools.
The CECIMO said that the general assessment among EMO exhibitors was positive. Over two thirds of them were more than satisfied with the show. As one of the exhibitors put it: "This is the best show I ever experienced." An additional plus consisted of exhibitors being able to reach all their key industrial target groups, especially automotive manufacturers and subcontractors, the mechanical engineering industry and the entire spectrum of metalworking and metal processing.
International Representation
Other important indicators pointing to the leading role played by EMO Hannover were also up, including the percentage of visitors from outside Germany. Over 37% of trade visitors came from abroad, from a total of 80 different nations. Commensurate with the high level of European demand for machine tools, the number of visitors from Western Europe was up sharply, particularly from Switzerland, France, Italy, Sweden and Austria. The biggest contingents of visitors from overseas were from India and the U.S.
The CECIMO claimed the number of attending executives rose to nearly 60% of overall attendance. Exhibitors' perception of EMO as a unique forum for winning new customers was reinforced again this year, with over a third of all visitors being first-timers.
As the leading innovations forum for the metalworking industry, EMO Hannover 2007 showcased a wide variety of cutting-edge technologies which are now market-ready following their unveiling at the previous event. One problem which has been addressed in a number of new solutions this year is the reduction of preparation time. Many machine-tool manufacturers have considerably reduced the time required for tool changing or now provide advance simulations of the setup procedure, considerably reducing machine overheads as a result. And the integration of control systems into the manufacturing process was another hot topic at this year's show. This year, machine-tool manufacturers teamed up with software providers to present brand-new approaches to enhancing customer productivity by optimizing the production process in terms of production time or surface quality.
Eager Participation by Taiwan Suppliers
According to a survey conducted by the Taiwan Association of Machinery Industry (TAMI), a total of 151 Taiwanese manufacturers of machine tools and relevant components took part in the EMO Hannover 2007, up 20% from the preceding edition.
TAMI chairman Fred P.C. Huang noted that the European Union is now the world's largest production and consumption marketplace. Machine tools produced by the EU member nations not only meet domestic demand but are also exported globally. Many exhibitors participated in the show to boost their share of the EU market.
Huang noted that mainland China was the largest outlet for Taiwan-made machine tools last year by absorbing 38% of Taiwan's total machine tool exports, with the EU coming in second with 20% last year.
TAMI's tallies showed Taiwan exported US$1.57 billion worth of machine tools to the world market in the first half of this year, up 16.7% year-on-year. The island exported US$360 million worth of the products to the EU in the first half of this year, accounting for 23% of Taiwan's overall machine-tool exports.
The eager turnout by domestic machine-tool firms showed they are ambitious to tap the European marketplace. Huang said Taiwan's machine-tool manufacturers have established a sound reputation globally over the past few years because of their persistent pursuit of developing high-precision products.
An estimate by the Industrial Development Bureau under the Ministry of Economic Affairs shows that the overall exports of Taiwan-made machine tools and relevant components may break the US$13 billion mark in 2010.
An analysis prepared by the TAMI, Taiwan's manufacturing firms participating in the EMO Hannover 2007 mostly displayed a variety of sophisticated machine models and technologies. For instance, Hiwin Technologies Corp., one of the island's leading manufacturers of linear-based components, displayed high-loading roller-type linear guideways, roller-type screws and robotic arms, and football-playing machines. Eric Y.T. Chuo predicted his company would see a 50% year-on-year growth in sales to the European marketplace this year.
Victor Taichung Machinery Works Co., one of Taiwan's largest manufacturers of machine tools, showcased six models of newly developed machine tools at the show, including vertical, horizontal lathes, and machining centers, and a lathe dubbed Vturn-40-220 especially designed for processing long metal bars.
Bert M.H. Huang, president of Victor Taichung, said his company has received orders for the Vturn-40-220 lathe that will keep his production lines booked till the end of this year since the model was debuted at the March Taipei International Machine Tool Show this year. Huang anticipated his company's participation in the EMO Hannover 2007 would help bring in more orders.
Showcasing Innovative Machines
The EMO Hannover 2007 saw many exhibitors from Taiwan showcase newly developed high-speed multi-stack machine tools to vie for more business opportunities in the European market.
Leading domestic manufacturers who took part in the EMO show included Tongtai Machine & Tool Co., Yeong Chin Machinery Industries Co., She Hong Industrial Co., Far East Machinery Co., Goodway Machinery Co. and Quaser Machine Tools Inc. These companies unanimously agreed that the European market is dominated by high-performance machine tools due to high labor costs.
Hsin-hua Yeh, president of She Hong, said in recently years some European manufacturers of automobile parts have retraced their way home from Turkey, as well as those who tried to turn out high-quality goods in Eastern European nations.
About a decade ago, some European manufacturers of automotive and related parts rushed to relocate production to Eastern Europe and Turkey to cope with skyrocketing labor costs and social welfare contributions. But they have found that they couldn't make high-quality products in Eastern Europe and Turkey as they did at home, which has pushed them to return home. Such situation has helped to raise demand for high-efficiency and high-performance machine tools in the European marketplace.
Goodway general manager Fu-chu Hsu said his company showcased five top-tier machine tools at the EMO Hannover 2007 to meet the European market's demand for laborsaving and high-efficiency production equipment. Hsu said the five machine tools are equipped with dual spindles, dual power turrets and Y-axis, allowing such multiple machining functions as cutting, milling and drilling without the need to move workpieces. He believed his company would eventually land orders for 50 such machines worth over NT$100 million (US$3.03 million) from both the EMO and follow-up business.
Factory Automation Technology Co., a subsidiary of Far East Machinery Group, displayed a multi-task machine tool, equipped with a high-speed spindle and power turret, to tap the automotive part industry in Europe. In addition, the company also showcased its niche model—a horizontal boring & milling machine.
Effectively meeting the European market demand for high-efficiency machine tools, Factory Automation claimed it landed orders from Italian, Finnish and Turkish buyers at the EMO event on-the-spot. The company anticipated it would see exports to the European market double this year from the preceding year's level.
Taiwan Contingent Sees Success
Thanks to the increased demand for price-competitive and high-quality Taiwan-made machine tools, most of the Taiwan participants in the EMO Hannover 2007 claimed they saw substantial growth in orders landed at the show compared to that held two years ago.
Taiwanese exhibitors who signed up orders of more than 100 machine tools included She Hong Industrial Co., Yeong Chin Machinery Industries Co., Tongtai Machine & Tool Co., Goodway Machine Corp., Awea Mechantronic Co., Falcon (Chevalier) Machine Tools Co., Quaser Machine Tools Inc., and Far East Machinery Co. In addition, Hiwin Technology Corp., Taiwan's leading manufacturer of linear-based mechanical components, also saw significant success in closing deals at the show.
Hiwin claimed it has signed a three-year supply contract with DMG, the largest manufacturer of machine tools in the whole of Europe. In addition, the company has also acquired orders from Heller Co., the well-known manufacturer of automobile processing equipment in Europe. With the acquisition of the big-ticket orders, the company predicted its sales in the European marketplace will double to reach 50 million euro next year to become one of Europe's top-three suppliers of linear motion parts.
Such big-ticket orders bagged by these leading manufacturers will help the domestic machine-tool industry keep its double-digit growth in annual sales in 2008.
She Hong's president Hsin-hua Yeh said his company displayed the newest-developed machine tools at the 27th Hall of the EMO Hannover 2007, which also housed many big names from Germany, Japan, the U.S. and South Korea. Yeh claimed his company received orders for some 100 machine tools worth over NT$300 million (US$9.23 million) on-the-spot during the six-day show.
Tongtai boasted it landed on-the-spot orders of some 60 machine tools from customers mainly in the aerospace parts and mold sectors. The company said the demand for machine tools by components manufacturers in Europe has been on the rise.
Others like Falcon (Chevalier), Goodway, Awea, Quaser, and Far East all boasted that they received orders for dozens of various types of machine tools, with some even landing huge orders for some 100 machines.
In addition to the manufacturers of machine tools, upstream manufacturers focusing on the production of precision mechanical components and parts, including Pou Yuen Technology Corp., Golden Sun Industrial Co., and Habor Precision Industry Co. also chalked up considerable success at the show.
C.C. Wang, vice president of the TAMI, noted Europe and Asia would become the two engines driving the global machine-tool industry to continue growing in 2008. He predicted that Taiwan's machine-tool industry would see double-digit growths in both production and exports in 2008.
Hiwin Clinches Big-ticket Orders
During the exhibition, Hiwin announced that its German affiliate—Hiwin GmbH has clinched a big-ticket order from DMG, Europe's largest machine-tool manufacturer. The deal will see Hiwin supply precision mechanical components to DMG over the next three years, which will, according to estimates, enable Hiwin GmbH to generate annual sales topping 50 million euros in 2008, becoming the third-largest supplier of linear transmission components.
In addition to DMG, other leading European firms have also placed orders with Hiwin, including Homag Co., Europe's largest manufacturer of woodworking machinery; Heller Co., the specialized supplier of processing equipment for Mercedes Benz and BMW automobiles; and Manz Co. and Ekra Co., both are best-known suppliers of solar-energy equipment.
Hiwin Technologies president Eric Y.T. Chuo said Hiwin GmbH has seen annual sales quadruple over the past five years. The German affiliate achieved 60% and 50% annual growths in order volume and sales in the first eight months of this year.
At present, Hiwin GmbH has an 8% market share in Germany for roller screws and linear guideways. In the next few years, the company will narrow the lead held by such big names as THK Co. and Star Co. in the field of linear transmission products.
Chuo stressed that his company is poised to become the world's largest manufacturer of roller screws, the world's third-largest manufacturers of linear guideways, and the world's fourth-largest manufacturer of robots.
Hiwin Technologies noted that its production capacity will sharply increase after its two plants, one each located in Yunlin Technology Industrial Park and Taichung Precision Machinery Industrial Park, are completed in the next few years.
It is estimated Hiwin Technologies will see annual sales break the NT$10 billion (US$303.3 million) mark in 2009 to meet the goal set by the Ministry of Economic Affairs as a NT$10 billion flagship firm.
Bellwether in Large-sized CNC Lathes
Jashico Machine Manufacture Co. is one of the few domestic manufacturers who captured ample attention of foreign buyers at the EMO Hannover 2007 because it showcased a large-sized, multifunctional CNC lathe. The company is famous for its unique technologies in developing large-sized CNC lathes that are marketed under its own "Top-Turn" brand, while the company has seen its dedication to developing sophisticated technologies in producing large-sized CNC lathes pay off.
Starting by producing high-speed lathes 25 years ago, Jashico turned to focus on developing large-sized lathes in 1992 and began rolling out the high-value-added products in the following year. At present, the company's main product line is the CNC lathes with spindle bores of nine inches up to 21 inches in diameter.
"World demand for large-sized lathes will grow rapidly in the decade to come along with burgeoning development of oil-exploration, wind energy, nuclear energy, papermaking and steel refining. We have profited from such rosy scenario over the past three years," commented George Wang, president of Jashico Machine Manufacture Co., Ltd.
To meet customer demand, the company claims it has developed Taiwan's largest slant-bed CNC lathe featuring large swing-over-bed, large-bore capable of processing workpieces of two meters up to 12 meters in length. The CNC lathe can be equipped with C-axis to cut, mill, drill and engrave, as well as serve as a planomiller and vertical lathe simultaneously. The machine saves users time on loading and unloading due to its special machine change capability for two-cycle processing of large workpieces.
At present, the company's most popular large-sized slant-bed CNC lathe features 14.5-inch bore, which is used for processing oil pipes. In the past, the company was capable of delivering the 14.5-inch model in 90 days after order confirmation; but now it takes 400 days due to backlog of orders.
Wang said his company began focusing on the production of large-sized slant-bed CNC lathes five years ago. As early as in 2004, the company acknowledged that it has to develop high-precision, multi-task lathes capable of milling, cutting and drilling to boost the added-value of its products. That year saw the company received a NT$4 million (US$123,070) subsidy from the MOEA through the special science and technology development program.
The company noted that it uses high-tier GB300 cast iron for machine beds. "Compared to general-purpose cast iron, the GB300 features more alloy ingredients," explained Wang. "At present, the GB300 is sold for NT$54 (US$1.63) per metric ton, compared to NT$40 (US$1.21) for general-purpose cast iron."
To facilitate the production of high-quality large-sized CNC lathes, the company imports high-priced TIMKEN-brand spindles from the U.S. The spindle for the 21-inch bore machine is priced as high as NT$2 million (US$60,600) each.
"At present, we have to set aside NT$3 million (US$90,900) annually to develop software, which is the backbone of large-sized CNC lathes," said Wang. "The huge investments in developing sophisticated software enable us to produce state-of-the-art lathes. Because of the huge investments in software development, we are capable of developing multi-task lathes that can cut, mill, drill, tap, engrave and grind. The investment in R&D and software has paid off as over 70% of our output is exported, mainly to the highly industrialized nations in Europe."
"The stability of large-sized CNC lathes hinges on the gearing system," comments Wang. "To ensure the quality of our large-sized CNC lathes, we stick to importing high-grade components from Germany. By employing our well-established design skill, we can install such components in the gearing system which is also encoder-sensor equipped to ensure high performance."
Three captions:
1.Over 166,000 visitors flock to the EMO Hannover 2007 to tap opportunities in machine tool arena.
2.A domestic machine-tool manufacturer talks with a foreign buyer.
3.Jashico captures foreign buyers' attention by showcasing the large-bore CNC machine tool. | |
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