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NEC's orders from Taiwan to remain flat

"We have enjoyed a long, established relationship with Taiwanese partners."

Hajime Sasaki, NEC chairman

NEC Corp, Japan's largest maker of personal computers, said its orders from Taiwanese suppliers this year would be flat.

"We have enjoyed a long, established relationship with Taiwanese partners," NEC chairman Hajime Sasaki told reporters in Taipei yesterday.

NEC is expected to purchase electronics components and products worth US$3 billion from local original equipment manufacturers, a level similar to last year's, he said.

The Japanese electronics giant, which is the second-largest Japanese procurer after Sony Corp, said on Monday that its annual net profit totaled ?9.2 billion (US$76 million), reversing the ?10 billion loss the previous year. It projected earnings would triple this fiscal year on an expected recovery in its battery and cellphone operations.

NEC, which did not break down quarterly numbers, has been struggling because of slumping cellphone and computer sales combined with costs to restructure its computer chip operations.

The Tokyo-based company mainly buys PC-related products and wireless equipment, including optical modems from Taiwan, said Shinichi Kakimura, president of NEC Taiwan Ltd.

Kakimura said that the company's product portfolio should be the same this year.

Both made the remarks on the sidelines of the NEC Taiwan Solution Fair, held in conjunction with the 25th anniversary of NEC Taiwan.

NEC's procurement level from Taiwan has been stagnant in recent years as a result of switching orders to China, where most IT firms have set up manufacturing bases.

In 2005, NEC spent around US$3 billion in Taiwan, accounting for 12 percent of its global procurement of US$25 billion.

Purchases in 2004 were worth US$2.66 billion, the company said.

NEC, which also sources handsets, servers and memory chips from Taiwan, has partners including Quanta Computer Inc (廣達電腦), First International Computer Inc (大眾電腦) and Arima Computer Corp (華宇電腦).

Hoping to tap into the strong IT research base here, NEC announced on May 14 it would set up a mobile WiMAX research center in Taiwan by end of the year.

End-to-end live wireless environments using NEC's WiMAX base stations and application service platforms will be provided at the new center.

NEC will open the center to Taiwan's equipment vendors to allow the implementation of inter-operability tests, support service providers and software vendors in the development and verification of application services, it said.

Additional reporting by AP
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