Flextronics International Ltd, the world's largest electronics manufacturing services (EMS) company, plans to increase procurement from local component suppliers to meet the growing demand from its business expansion, officials said yesterday.
"We see Taiwan as a very good place to source many components in terms of quality and pricing," Tom Atkinson, Flextronics senior manager of consumer electronics, told prospective suppliers.
Atkinson said Taiwan has long been famous for producing high-end technology products and its close business ties with China enables Taiwanese companies to offer competitive pricing.
Atkinson made the remarks at a meeting organized by the Taiwan External Trade Development Council (TAITRA,
Flextronics, based in Singapore and operating from San Jose, California, has manufacturing bases in 29 countries.
It makes products for international brand names such as Sony Ericsson Mobile Communications AB's cellphones, Hewlett-Packard Co's printers and Microsoft Corp's Xbox game player.
The company plans to outsource a wide range of products from Taiwanese suppliers, concentrating on parts for mobile phones, digital cameras and other items, said Clint Liang (梁忠楨), commodity manager of global procurement for Flextronics' Asia division.
Last year, the company bought US$10.7 billion in component materials worldwide. The company plans to spend NT$13 billion to NT$14 billion in the sector this year, Liang said.
Neither Atkinson nor Liang would discuss details of the company's procurement objectives in Taiwan.
Local suppliers are eager to form partnerships with Flextronics. BenQ Corp (明基電通), Mustek Systems Inc (鴻友科技), Primax Electronics Ltd (致伸電子) and Aiptek International Inc (天瀚科技) were among the more than 200 local suppliers who attended yesterday's meeting.
"Although Flextronics sets strict qualifications and requirements for its strategic partners, we would still like to work with them as the volume of orders is expected to be huge," said Joseph Yu (游家瑋), senior sales specialist at Bothhand Enterprise Inc (帛漢公司), an electronic components manufacturer.
There is speculation, however, that Flextronics has been forced to look for cheaper components amid fierce competition in the industry with major competitors such as California-based Solectron Corp and Taiwan's Hon Hai Precision Industry Co (
Flextronics last month revealed its third-quarter result, reporting earnings of US$21.4 million, or US$0.04 a share, compared with a loss of US$6.48 million, or US$0.01 a share, last year due to the rebounding demand for high-tech goods.
Overall, Flextronics gained US$13.4 billion in revenue in the last fiscal year.
The company, which is in talks to acquire nearly all of Nortel Networks' factories for about US$500 million, expects a rosier year as major restructurings in the electronics manufacturing industry are completed, excess equipment capacity is substantially reduced and demand continues to rise, said chief executive Michael Marks in the company's earnings report last month.
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