| Prime News | | ![]() | ![]() | Tax Brackets for Personal Income Likely to Be Adjusted
Taipei, Nov. 12, 2007 (CENS)--With accumulated price hike having topped 10%, tax brackets for consolidated income tax is likely to be raised by the same rate when local tax payers file income tax returns in May 2009 for their 2008 income.
The Ministry of Finance (MOF) reported that the consumer price index of the base period for 2008 tax returns, from November 2006 to October 2007, averaged 105.23, 10.02% higher than average 95.65 consumer price index of the base period for 1997 tax returns, triggering automatic adjustment in tax brackets under the current mechanism.
As a result, coverage of the lowest 6% tax bracket will be raised to under NT$410,000, from NT$370,000 now and that of the highest 40% bracket to over NT$4.09 million, from NT$3.72 million.
The MOF pointed out that medium-to-low-income people will benefit more from tax-bracket adjustment than high-income people. Tax rate for taxable income ranging NT$370,000-410,000, for instance, will drop from 13% to 6%, for a scale of 50%, while the rate for taxable income ranging NT$3.72-4.09 million will decline from 40% to 30%, for a scale of 25%.
Meanwhile, the amounts of exemption and deduction for personal taxable income, as well as the amount of taxable-income exemption for gift tax and inheritance tax, for 2008 will remain unchanged, as the accumulated CIP increase has not reached 3% for the former and 10% for the latter since the year when the amounts were adjusted last time.
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| | ![]() | | | Gov't Fostering Five Trillion Industries in Industrial Development Roadmap
Taipei, Nov. 12, 2007 (CENS)--The government will foster the development of five trillion industries, in a bid to boost the per capita income to US$30,000 by 2015, according to the industrial development roadmap to be presented by the Ministry of Economic Affairs (MOEA) during the national industrial development meeting inaugurated today (Nov. 12).
The five trillion industries will form the core of the roadmap for Taiwan's industrial development prior to 2015, namely semiconductor, flat panel display, petrochemical, steel, and machinery, which will be supplemented by the development of biotech, photovoltaic, digital-content, and communications industries, in order to alleviate the reliance on a few specific industries. Of the five core industries, annual output value of semiconductor and flat panel display has topped NT$1 trillion, which the government will seek to double.
Chen Chao-I, director general of the Industrial Development Bureau, MOEA, noted that in addition to the stable outlook of the semiconductor and flat panel display industries, it's only matter of time for the petrochemical, steel, and machinery industries to see their output value exceeding NT$1 trillion, forecasting that output value of the machinery industry will hit NT$1.5 trillion by 2015.
To overcome the environmental blockade for steel and petrochemical industries, the MOEA will cement consensus in the meeting seeking adequate expansion of the two industries, by pushing materialization of several on-going mega projects, including renovation of the "Third Naphtha Cracking" complex of CPC Taiwan and construction of the Kuokuang petrochemical project. Development of the two industries, however, will aim at meeting domestic needs.
MOEA officials noted that despite high resource consumption, adequate expansion of steel and petrochemical industries is essential for the nation to achieve the goal of boosting per capita GNP to US$30,000 by 2015.
To foster the development of the photovoltaic industry, the government, in addition to development of supply capacity for silicon material, will subsidize installation of photovoltaic facilities domestically.
Meanwhile, the government will build up testing facilities for next-generation wireless broadband technology WiMAX and assist the development of smart robots by forming integrated development strategy covering ICs design and the production of core tool components, such as recognizing sensing component.
With development of the cutting-edge industries, the MOEA seeks to boost the added-value rate for the manufacturing industry to 25%, from 20.8% now, by 2015, when the nation's GDP will top NT$20 trillion.
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| | ![]() | | | Hon Hai Ups Investments to US$267 M. in Mainland China
Taipei, Nov. 12, 2007 (CENS)--Hon Hai Precision Industry Co., the world's largest electronic manufacturing service provider, will increase investments by US$267 million (NT$8.675 billion) in mainland China by using preserved earnings to increase capital.
Hon Hai noted it would increase investments in its 10 factories in the mainland, including those located in Kunshan of Jiangsu Province, Taiyuan of Shanxi Province, Tianjin Municipality, Shenzhen of Guangdong Province, and Yantai of Shandong Province.
The increased investments will cover such industries as computer components, precision parts, precision molds, precision electronics, plastics, painting, and printing.
Recently, the company has resolved to invest US$35.1 million to establish a plant in Changsu of Jiangsu Province, which will be its first plant in Changsu. The Changsu plant is established to extend in-time services to Quanta Computer Inc.'s Changsu plant.
In Changsu, Hon Hai will set up two affiliates, including Fuyang Electronic Technology (Changsu) Co. and Fulin Electronic Technology (Changsu) Co.
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| | ![]() | | | FPG's Four Major Subsidiaries Post High Growth in October Sales
Taipei, Nov. 12, 2007 (CENS)--Each of the four major subsidiaries of the Formosa Plastics Group (FPG), including Formosa Plastics Corp. (FPC), Nan Ya Plastics Corp., Formosa Chemical & Fibre Corp. (FCFC) and Formosa Petrochemical Corp. (FPCC), saw high growth in October sales.
Each of Nan Ya, FCFC and FPCC saw October sales hit historic highs and FPC saw its sales in October grow the fourth-highest in history.
Thanks to the sharp increase in international crude oil prices, FPCC saw monthly sales grow a whopping 75.94% year-on-year to reach NT$70.436 billion (US$2.17 billion at US$1:NT$32.4) in October. An institutional investor predicted FPCC would continue its outstanding performance in the fourth quarter of this year.
Nan Ya saw October sales grow 49.63% year-on-year to reach NT$21.822 billion (US$673.51 million). Taiwan's largest manufacturer of ethylene glycol (EG), over the past several months Nan Ya has raked in sizable profits from the price hike in the products internationally. Of Nan Ya's October sales, that for EG accounted for NT$5.69 billion (US$175.61 million).
FCFC was the most profitable among FPG's four major subsidiaries in the first three quarters of this year. The company posted NT$6.73 (US$0.2) in earnings per share in the first three quarters. The company attributed the outstanding performance to the addition of new production capacity for SM (styrene monomer) and the completion of a third set of aroma production equipment. The company scored NT$23.216 billion (US$716.54 million) in October sales, up 57.02% year-on-year.
FPC registered NT$16.084 billion (US$496.41 million) in sales in October, up 44.96% annually. A foreign institutional investor rated FPC as investment grade as the company has a lot of stockholdings in Nan Ya and FCFC. In addition, FPC has been successful in exporting products to European marketplace.
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| | ![]() | | | Taiwan to Lower Wire Line Entry Threshold in 2008
Taipei, Nov. 12, 2007 (CENS)--The Cabinet-level National Communications Commission (NCC), Taiwan's communications-industry regulator, recently announced it will lower capitalization threshold for joining the island's fixed-line network industry by an average 53% next year.
New regulation will require new entrants to equip themselves with capitalization of NT$6.4 billion (US$193 million at US$1:NT$33), down from current NT$16 billion (US$484 million). For existing carriers, capitalization will be cut to NT$21 billion (US$636 million) from NT$40 billion (US$1.2 billion).
Senior commission officials noted that the reduction was made in consideration of the fact that carriers have halved installation cost of each telephone line to only NT$21,000 (US$636).
For new entrants, it is the third capitalization cut since the island's fixed-line network telecom market was deregulated in 1999.
In terms of individual service category, new entrants are required by the latest regulation to have capitalization of NT$4.8 billion (US$145 million) for license of local-connection service and capitalization of NT$800 million (US$24 million) each for long-distance license and international-call license.
Submarine cable providers are required to have capitalization of NT$420 million (US$12.7 million) for operation license, down from NT$800 million (US$24 million). Currently, there are four leasers in Taiwan including Asia Global Crossing Taiwan Inc., Taiwan International Gateway Corp., FLAG Telecom.
Currently, Taiwan's operating fixed-line network carriers include Chunghwa Telecom Co., Ltd., Taiwan Fixed Network Co., Ltd., New Century InfoComm Co., and Asia Pacific Telecom Co., Ltd. New Applicants include ICP Electronics Inc. and CYC Cable Corp.
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| | ![]() | | | SMC to Buy Back 4.1 Billion Shares Unloaded by Philips
Taipei, Nov. 12, 2007 (CENS)--Taiwan Semiconductor Manufacturing Co. (TSMC) recently decided to buy back the 4.18 billion of its shares that Royal Philips Electronics will offload for around US$1.5 billion.
The offloaded shares account for around a 2.85% stake in TSMC. After selling this portion of shares, Philips will still retain a 5.24% stake in TSMC.
TSMC will begin buying back this portion of shares over the next two years. To cushion expected impact of the share offloading, TSMC has asked Philips to offload the shares through four different measures including transferring to preferential recipients in block volume, issuing American Deposit Receipts (ADRs), publicly selling to TSMC and publicly selling or transferring to preferential financial institutions in block volume.
Industry watchers estimated TSMC shareholders will gain a 2-4% additional return once TSMC began reducing capitalization after taking over the shares from Philips. This will be the second capitalization-reduction case of Taiwan's chip-making industry after the one conducted by United Microelectronics Corp. (UMC) recently.
TSMC's director board will hold a meeting tomorrow to confirm the date, share volume and price of the upcoming procurement. The company's spokespersons said they were not authorized to comment the content of tomorrow's meeting. However, the company's chief financial officer, Lora Ho, said her company's scheduled director meeting for this month will hash over the plan.
Some institutional investors are optimistic about TSMC's planned capitalization reduction.
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| | ![]() | | | Taiwan's Leading Garment Makers See Mixed Performance in First 9 Months
Taipei, Nov. 12, 2007 (CENS)--Taiwan's leading garment makers witnessed mixed performance in the first three quarters of this year, with Makalot Industrial Co. enjoying a whopping annual rise of 56% in pretax profits while Tainan Enterprises Co. and Eclat Textile Co. posted negative corresponding percentages of 22.5% and 4%, respectively.
In October alone, Makalot raked in revenues of NT$1.415 billion (US$42.88 million at US$1 = NT$33), the highest of its kind ever recorded and presenting an annual growth of 23.79%.
The company used to spread its production bases in nine countries around the world, but today it has only five globally. This year Makalot has concentrated its operations in China, Cambodia and Vietnam, which together accounted for 50% of the company's total output last year and the percentage this year is estimated to rise to 55%-60%.
Thanks to the emphasis on R&D, the expansion of branded garments business, and the upgrading of manufacturing and marketing capability, Makalot is expected to see a sharp rise of 25% in revenues and 40% in profits this year.
Tainan Enterprises, influenced by the U.S. sub-prime mortgage storm, has experienced a downward trend in earnings this year. Its gross profit rate tumbled by more than three percentage points from a year earlier to 8.46% in the first nine months.
Eclat, like some of its counterparts, has in recent years turned to target Vietnam. The company established a garment plant there last year, with monthly production capacity of about 100,000 dozens of garments. The new plant officially came online in the second half of this year and is expected to generate profits next year.
Other than the garment plant, Eclat will kick off construction of a new knitting plant in the country by the end of this year, and the projected plant is slated to go online in mid-2008, with initial output of 600,000 kilogram of garments per month.
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| | ![]() | | | Johnson Health Sets up R&D Center for Massage Chairs in Japan
Taipei, Nov. 12, 2007 (CENS)--To expand its operations, Johnson Health Tech. Co., Taiwan-based and world's fourth largest manufacturer of fitness and gym equipment, recently established an R&D center for massage chairs in Osaka of Japan and is planning to further explore upscale massage chair markets in Asia, Europe and the United States.
K.C. Lo, chairman of the company, indicated that the market value of massage chairs in Japan is about NT$60 billion (US$1.82 billion at US$1 = NT$33) per year, which is estimated to see annual growth of 2%-3%. The large market niche for massage chairs in Japan is one of the main reasons for the company to set up the R&D message chair center there.
Today 70% of Johnson Health's massage chairs are sold in Asia, and, Japan absorbs half of the volume. Lo emphasized that Johnson Health is ambitious to compete with the leading brands of massage chairs in Japan, namely, Panasonic Family, Sony and Sanyo, all of which have also established their R&D centers for such chairs in Osaka.
Lo disclosed that the company would either build up a new brand or choose one out of its existing four —Matrix, Vision, Horizon and Johnson— for its massage chairs and is going to unveil two new models in Japan in mid-December. In addition, it is scheduled to debut in June of 2008 two more new models of high-end club-used massage chairs, which are both designed and manufactured in Japan as well.
Taking the advantages of low-priced parts supported by its plants in China, Johnson Health boasts lower manufacturing cost than its counterparts in Japan by about 25%, with its existing international sales network for fitness equipment also serving as a marketing channel for the massage chairs.
Lo optimistically predicted that the future for its massage chairs is promising and the revenues from such chairs would be very likely to account for 30%-40% of the company's total sales within five years.
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| | ![]() | | | Compal Posts Record Revenue, Shipment for Oct.
Taipei, Nov. 12, 2007 (CENS)--With a peak sales season for notebook PCs approaching, Compal Electronics Inc., one of the world's top four contract suppliers in the line, saw its sales revenue and shipment set new highs of NT$45.31 billion and 2.34 million units, respectively, in October, according to company sources.
Compal noted that but for short supply of related components, the firm would have reported stronger sales performance. Although optimistic about the market prospects for notebook PCs in the fourth quarter of this year, insiders in the sector project total market sales to grow only 10% from a quarter earlier.
Institutional investors, such as Citicorp Securities, already raise their projection of shipment growth posted by contract suppliers in the market to 10% from original 7% for the fourth quarter of this year. Some also predict Taiwan's notebook PC shipment to post an annual growth of 30% next year.
Compal recently reported its sales revenue of NT$45.31 billion for October, up 12.6% from September and 42.1% from last October. Over the first 10 months of this year, the firm scored aggregate revenues of NT$356.54 billion.
Besides, Compal also saw record shipment of 2.34 million notebook PCs in October, up 11.9% from 2.1 million units posted in September. The firm posted aggregate shipment of 18.47 million units for the past 10 months of the year, and has projected its annual shipment to break 20 million units to hit 23 million units for this year.
Taiwan's top four contract suppliers of notebook PCs are all optimistic about their sales prospects for the fourth quarter. Of them, Quanta Computer Inc. posted robust shipment of three million notebook PCs for October, and has seen other product lines contribute as much as 25% to its sales revenue, thanks to explosive market demand triggered by Christmas holidays.
Also, Wistron Corporation, raked in sales revenue of NT$29.849 billion in October, hitting a historical high. The firm projected its revenue for the fourth quarter to soar by 25% from the third quarter, after outbidding Quanta for Dell's orders for consumer models.
Focusing performance in the second half of this year, Inventec Electronics Corp. projects its notebook PC shipment to surge 50% in the fourth quarter from the third quarter, and to amount to nine million units for entire this year.
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| | ![]() | | | Asustek to Challenge Shipment of 1.5 M. Notebook PCs for Q4
Taipei, Nov. 12, 2007 (CENS)--After scoring a record shipment of 950,000 notebook PCs in October, including 500,000 units sold under its own brand, Asustek Computer Inc., a world-level supplier in the line, is poised to challenge a record quarterly shipment of 1.5 million units for the fourth quarter of this year, according to industry sources.
The sources said that Asustek, already No. 9 brand of notebook PCs in the world, is expected to score annual shipment of four million units this year to catch up with Apple, the world's No.8 brand, and other Japanese brands, such as Fujitsu Siemens and Sony, in 2008.
Asustek reported revenue of NT$67.729 billion for October and aggregate revenue of NT$590.8 billion for the first 10 months of the year, up 56.5% from a year earlier. The firm's annual revenue is estimated to reach between NT$730 billion and NT$750 billion this year.
Noteworthy is that Asustek's October revenue mainly came from sales of notebook PCs, which amounted to 950,000 units in the month alone. The brand also saw sales of own-brand models set a record of 500,000 units for the first time, fully demonstrating Asus-branded notebook PCs have been actually well received and may help the firm challenge quarterly shipment of 1.5 million units.
Asustek posted net profits of NT$7.35 billion for the third quarter of this year, and aggregate net profits of NT$21 billion for the first three quarters.
With the global market for desktop PCs turning sluggish, institutional investors expected Asustek's shipment of motherboards to reach 15.5 million units for the fourth quarter, and 59 million for this year, slightly lower than an original projection of 60 million units.
Besides, Asustek will have to clear NT$800 million worth of overdue business income tax payment in the fourth quarter, and appropriate provisions against other expenditures and pensions this year. This has made institutional investors reduce Austek's annual profit growth projection to 30% from 50%.
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