BenQ Corp's (明基) purchase of Siemens AG's handset operation appeared to begin a drawn-out consolidation in Taiwan's handset industry, after a local handset maker announced late Wednesday its plan to withdraw from the business in July.
Lite-On Technology Corp (光寶科技), a leading electronics maker in Taiwan, plans to indefinitely suspend its mobile phone assembling business on July 1, the company's financial executive Andrew Lin (林群) said in a statement Wednesday.
"We will focus on manufacturing handset components such as keypads and camera modules," Lin said in the statement.
The company said its exit from the low-margin business is because major handset vendors only outsource production of low-end models.
But industry watchers said this is just part of the reasons behind Lite-On's decision to get rid of the struggling unit, as the company was never able to achieve economies of scale and is facing tenacious competitors.
Daniel Wang (王德善), an analyst with Primasia Securities in Taipei, said the BenQ-Siemens deal has dashed Lite-On's last hope of getting more orders from Siemens, one of its two biggest customers, to lift the division's poor profitability as BenQ will make phones for Siemens taking over the German company's existing partners.
Quanta Computer Inc (廣達電腦), which also makes phones for Siemens, could suffer setback in orders, Wang said, but that should not inflict damage to the world's biggest laptop computer contract maker.
"The Lite-On bombshell is just the beginning of the chain reaction set off by BenQ-Siemens deal," said Steven Tseng (曾續良), an electronic hardware analyst with Yuanta Core Pacific Securities (
“Big is beautiful. Only price matters,” he said.
Analysts said only big names like BenQ and Foxconn International Holdings Ltd (富士康), a Hong-Kong-listed handset manufacturing affiliate of Hon Hai Precision Industry Co (鴻海精密), would survive in this industry overburdened with contract manufacturers.
To stay competitive, Foxconn decided to acquire Chi Mei Communication Systems Inc (奇美通訊) in May to boost cost-saving and design capabilities, while Compal Electronics Inc (仁寶電腦) proposing a similar move but at a much smaller scale.
Compal President Ray Chen (陳瑞聰) last week said he is considering combining the company's handset division with its mobile phone subsidiary Compal Communications Inc (華寶通訊). He didn't specify the time frame for this plan.
Compal Communications is Taiwan's No.2 handset maker. The company targets a shipment of over 25 million units this year.
Even so, Yuanta's Tseng said he remained gloomy over the contract making industry.
“I won't be too optimistic about the result, or the prospect of Taiwan's handset contract manufactures over the next few years,” he said.
Taichung reported the steepest fall in completed home prices among the six special municipalities in the first quarter of this year, data compiled by Taiwan Realty Co (台灣房屋) showed yesterday. From January through last month, the average transaction price for completed homes in Taichung fell 8 percent from a year earlier to NT$299,000 (US$9,483) per ping (3.3m²), said Taiwan Realty, which compiled the data based on the government’s price registration platform. The decline could be attributed to many home buyers choosing relatively affordable used homes to live in themselves, instead of newly built homes in the city’s prime property market, Taiwan Realty
The government yesterday approved applications by Alphabet Inc’s Google to invest NT$27.08 billion (US$859.98 million) in Taiwan, the Ministry of Economic Affairs said in a statement. The Department of Investment Review approved two investments proposed by Google, with much of the funds to be used for data processing and electronic information supply services, as well as inventory procurement businesses in the semiconductor field, the ministry said. It marks the second consecutive year that Google has applied to increase its investment in Taiwan. Google plans to infuse NT$25.34 billion into Charter Investments Ltd (特許投資顧問) through its Singapore-based subsidiary Fructan Holdings Singapore Pte Ltd, and
JET JUICE: The war on Iran’s secondary effects have seen fuel prices skyrocket, knocking flight schedules down to earth in return as airlines struggle with costs Airline passengers should brace for more irritation in the next few months as carriers worldwide cancel flights and ground planes to cope with stratospheric increases in jet-fuel prices. Dutch flag carrier KLM is the latest company to cut its schedule, saying on Thursday that it would scrap 80 return flights at Amsterdam’s Schiphol Airport in the coming month. That puts it in the same league as United Airlines Holdings Inc, Deutsche Lufthansa AG and Cathay Pacific Airways Ltd, which have all pruned itineraries to mitigate costs. Global capacity for next month has been reduced by about 3 percentage points, with all
The US said it plans to help build a first-of-its-kind industrial hub in the Philippines to boost production of inputs crucial to US supply chains. The 4,000-acre hub is intended to be “a purpose-built platform for allied manufacturing” and “an investment acceleration hub where the specific industrial activities are shaped by market demand,” the US Department of State said on Thursday. The project — touted as an “economic security zone” — would be within the Luzon Economic Corridor, a flagship economic project backed by the US and Japan on the main Philippine island. The project was also described as “the first artificial intelligence
RSS