Mon, Oct 06, 2014 - Page 14 News List

China 4G efforts forecast to benefit device suppliers

OPPORTUNITY:With China home to the largest number of phone users in the world, the onset of its 4G network holds promise for smartphone components suppliers

Staff writer, with CNA

With China gearing up for construction of its 4G telecom infrastructure, Taiwan’s device suppliers are expected to benefit from rising demand across the strait in the fourth quarter of the year and beyond, market analysts said on Saturday.

They said industries such as integrated circuit (IC) packaging and testing services, IC substrate manufacturers and quartz crystal producers would benefit from the development across the strait.

China Mobile Ltd (中國移動), the world’s largest telecom operator, is expected to double its number of 4G base stations to 1 million by the end of the year, according to the Market Intelligence and Consulting Institute (MIC, 產業情報研究所), a division of the Taipei-based Institute for Information Industry.

So far, China Mobile has 40 million 4G subscribers and the number is expected to surpass 50 million by the end of the year, accounting for 16.6 percent of 4G subscribers worldwide, the MIC said.

In addition, Apple Inc’s two new iPhones — the 4.7-inch iPhone 6 and the 5.5-inch iPhone 6 Plus — are to go on sale in China on Oct. 17, with the launch expected to further raise demand for 4G services in China and in turn give a boost to Taiwanese firms in the Apple supply chain, analysts said.

As a result, local IC packaging and testing services providers, including Siliconware Precision Industries Co (SPIL, 矽品精密) and Advanced Semiconductor Engineering Inc (日月光半導體), are upbeat about their earnings outlook for the fourth quarter and for next year.

SPIL chairman Bough Lin (林文伯) said that with the rising demand for 4G services in China, he expects Taiwan’s IC packaging and testing sector to continue to enjoy stable growth into next year.

In the IC substrate sector, Kinsus Interconnect Technology Corp’s (景碩科技) 4G devices are expected to account for 25 percent of its total sales this year, analysts said, indicating that strong demand in China has been driving the company’s growth.

In the quartz crystal business, strong demand resulting from base station construction in China’s 4G services is expected to increase TXC Corp’s (晶技) high-end device shipments, analysts said.

They estimated that quartz crystals used by base stations in 4G telecom services would make up almost 10 percent of TXC’s total sales this year.

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