Tue, Oct 30, 2007 page12

• Yageo marks 10 years in China

  AGGRESSIVE Buoyed by the growth of the China market, the nation's largest passive components service provider is aiming for revenues of NT$50 billion in three years

  • By Jessie Ho / STAFF REPORTER
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  Yageo Corp (國巨), the nation's largest passive components service provider, yesterday celebrated its 10th anniversary in China by opening its second plant in Suzhou, saying it aims to become an industry leader.

  The Second Suzhou Plant will become the world's largest single passive component back-end production line, with monthly capacities of resistor chips (R-Chips) and multilayer chip capacitors (MLCC) reaching 36 billion and 11 billion pieces respectively by the end of next year, the company said in a statement.

  "Yageo launched operations in China in 1996 and, in 10 years, we've established a complete production, sales and logistics network in southern, eastern and northern China, creating the world's largest passive component supply chain," chairman Pierre Chen (陳泰銘) said in the statement.

  

  From right, Suzhou Deputy Mayor Mei Zhengrong, Yageo Corp CEO Pierre Chen and Tokyo Weld CEO Yoshiro Kubota take part in the groundbreaking ceremony for phase two of the construction of Yageo's Second Suzhou Plant.

  PHOTO: CNA

  In the Chinese market, Yageo has assumed the No. 1 position in R-Chips, with a 39 percent market share, and the second position in MLCC, with a 19 percent share, behind Japan's Murata electronics Co, the company said.

  Yageo plans to boost its monthly capacity of R-Chips to between 44 billion and 45 billion pieces, and that of MLCC to between 22 billion and 23 billion pieces, by the end of next year, Chen said in an interview with the Central News Agency.

  "Demand is strong and our target of NT$50 billion (US$1.54 billion) in revenue in three years has not changed," Chen said.

  Yageo's sales for last year grew by 23 percent to NT$20.39 billion. For the first nine months of the year, the company's revenue increased by 11 percent from a year ago to NT$16.66 billion.

  Yageo yesterday broke ground for the second phase of construction at the Second Suzhou Plant. The capacity expansion is necessary to keep pace with customer demand, in particular from the rapidly expanding Chinese market, it said.

  More than 50 percent of Yageo's revenue comes from China, and the percentage is expected to increase to 75 percent in the next three to five years, Yageo CEO David Huang (黃峻樑) said.

  Driven by strong global demand, shipments of laptop computers, mobile phones and LCDs will increase by 22 percent, 10 percent and 3 percent respectively next year, said Ting Chung-yi (丁忠儀), Yageo's general manager of China Operations.

  Growth in the Chinese market will outpace that in the global market as a result of surging domestic demand and business opportunities brought about by next year's Beijing Olympics, Ting said. Yageo predicts 40 percent and 20 percent increases in Chinese sales of notebook computers and mobile phones respectively, and 67 percent for LCD TVs next year, Ting said.

  To consolidate its leading position, Yageo said it would build a third research and development center in Suzhou to complement those already in the Netherlands and Taiwan.

  Meanwhile, to expand sales channels in China, Yageo's board yesterday approved a proposal for the company's subsidiary, Yageo Holding (Bermuda) Ltd, to invest approximately US$3.2 million in Ko-E Holding (國益控股).

  Shares of Yageo closed up 2.43 percent at NT$12.65 on the Taiwan Stock Exchange yesterday.
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