Source: Taiwan technology
Date published: 12 Jan 2006
LCD Monitors, Laptops to Drive Taiwan IT Hardware Value in 2006
During 2006, combined shipment value for 8 major product categories exported by the Taiwan IT hardware industry is expected to run over US$85,6 billion, according to the Market Intelligence Center, (MIC), a Taipei-based ICT industry research think tank. The export value will receive a powerful boost from growth of notebook PCs and LCD monitors with increases of 18% and 5%, with other product categories such as servers and desktop PCs coming as a close second with 9% and 11% , while digital still cameras are anticipated to climb by 26,2%.
During 2006, gains in many of the product categories will come from value-line models and emerging markets as the industry's mainstream shipments are based on mature technology. This is likely to intensify Taiwanese dominance of global IT hardware industry volume, but will bring with it inevitable price declines.
To ward off the deleterious effect on shipment value, Taiwan makers are continuing to work toward higher value-added products, improved innovation competencies, and worldwide logistics integration, as well as product design and marketing based on consumer behavior trends.
MIC said that in 2005 aggregate shipment value for the 8 product categories totaled US$77 billion, a growth of 10,5% from 2004.Notebook PCs and LCD monitors were once again the major force behind the growth. In terms of share of global supply, Taiwan was collectively the world's largest producers of notebook PCs (82.4%). Motherboards (98.3%). LCD Monitors (71.7%) and CDT Monitors (53.4%) by volume. Taiwan's share of global supply for optical disk drives, digital still cameras, and servers reached 40.1%, 41.8% and 34.5%, respectively, aggregately accounting for the second largest volume of any nation in each product category.
During 2006, gains in many of the product categories will come from value-line models and emerging markets as the industry's mainstream shipments are based on mature technology. This is likely or intensify Taiwanese dominance of global IT hardware industry volume, but will bring with it inevitable price declines.
To ward off the deleterious effect on export value, Taiwan makers are continuing to work towards higher value-added products, improved innovation competencies, and worldwide logistics integration, as well as product design and marketing based on consumer behavior trends.
Taiwan DSC Industry Enjoys Robust Growth
In spite of the reclining growth rate of worldwide DSC ( Digital Still Camera ) shipment, Taiwan's DSC industry has been expanding rapidly in 2005, with exports of approximately 32 million units, up 1% over 2004, accounting for 44% of world supply.
"In anticipation of US and Japanese makers continuing the increase outsourcing, the Taiwanese DSC industry for 2006 is expected to grow 30% reaching 50% of worldwide market share" analysts of the MIC said.
The world's major regional markets for DSCs have gradually saturated, Household penetration rates have reached nearly 50% in the US and Western Europe, and exceed 60% in Japan. As a result, the overall growth rate of the digital still camera market has slackened. This trend, together with development of product specifications maturing, the DSC market is suffering from an acute price competition, forcing the world's major DSC makers to outsource production to cut down costs.
From the second quarter of 2005, major Japanese and US DSC vendors have continuously released orders enabling the Taiwan DSC industry to grow rapidly. In the third quarter, Japanese makers expanded orders to Taiwan makers, boosting overall shipment volume of the Taiwan DSC industry to nearly 9,5 million units,, up 30% sequentially and 60% year-on-year.
In the third quarter of 2005, Taiwan makers focused on producing models over 4 Megapixels, which accounted for 85% of their total shipment share. With market demand for higher resolutions, Taiwan makers have witnessed shipment share over 50% for 5 Megapixel and above models from the second quarter. Evidenced by the increase in the resolution of mainstream DSCs, Taiwan makers have gradually narrowed their technological gap with Japanese makers and upgraded their orders from value-line models to higher levels. However, under the acute price competition, market prices for DSCs have plunged, with average selling orices dropping to US$ 86.3 in the third quarter of last year.
With the market demand shifting towards high pixels, high optical zoom and slim design, first-tier Taiwanese makers have been actively boosting the percentage of self-produced components as will as implementing forward and backward integration, in order to enhance their competitive edge. Furthermore, they have gradually caught up with Japanese makers in technology and widened their technological gap with second and third tier makers. With improved technology and economies of scale, first-tier Taiwan makers have received increasing amounts of orders released by US and Japanese vendors, thereby furthering industrial concentration.
Merging Markets Help Drive Motherboard shipments in 2006
According to analysts in Taipei, worldwide motherboard shipment volume in 2005 was 145 million units, mainly due to brisk demand in emerging markets such as India. Russia and Brazil. In addition, market demand in North America has remained slightly upward, while the lull Western European market showed slight signs of improvement nearing the end of 2005.
In 2005, Taiwanese motherboard shipment volume constituted approx. 98% of worldwide market share. For all of 2006, volume is projected to reach 153 million units.
With customs statistics not finalized at editing time, the Market Intelligence Center (MIC) reports that Taiwan motherboard shipment volume will hit approximately 98,3% of worldwide market share in 2005.
Taiwan Mobile Phone Industry Gains from Low-Cost Handsets
Riding the wave of new handset demand running through emerging markets as well as healthy replacement demand in mature markets, global mobile phone demand continues a strong pace. Global mobile phone shipments was approx. 772 million units of which Taiwan had a share of nearly 77 million, up 47% from 2004.
While the overall bulk of Taiwan mobile phone exports derived from Motorola and Sony accounted for 75% of all Taiwanese output in 2005 ( source: MIC ) branded business is on the rise. BenQ turned out Taiwan's first 3G ( UMTS ) phone and due to its acquisition of the Siemens mobile phone division, will benefit from demand in Europe and Latin America.
While first-tier manufacturers increased shipments to major brands like Motorola Sony Ericcson, Panasonic and NEC, the performance of second-tier Taiwan ODMs was less impressive. One of them announced an indefinite suspension of its mobile phone operations, others have been effected by a failure to secure contracts for new models while existing models are reaching the end of their production runs. Second-tier shipments have also been hit by the increase in fake-branded and gray market handsets in China, which lowered demand for private label orders.
Taiwan WLAN Market Importance on the Rise
Exports of Taiwan's wireless local area network ( WLAN ) industry, including network interface cards (NIC) and access points (AP) will experience continuing growth in 2006, as companies are currently expanding their business in WPAN ( Wireless Personal Area Network ) by integrating WLAN and Bluetooth, as well as the major WMAN ( Wireless Metropolitan Area Network ) technology, WIMAX.
All these developments will stimulate high industry growth, MIC analysts said.
The Taiwan WLAN industry is comprised of Taiwan companies that produce WLAN NIC and AP in China and Taiwan for shipment to points throughout the world. Taiwanese output accounts for over 80% of worldwide WLAN supply.
hree major changes were observed in the Taiwan WLAN industry during 2005. The emerging technology Multiple/Input Multiple/Output (MIMO) is triggering a new wave of interest. MIMO has a wide range and high transmission speeds, and it is expected to replace 802.11g as the mainstream technology. However, retail prices for offerings using MIMO are quite high and standards hae not yet being decided upon, making for lower than forecasted sales. WLAN is also increasingly entering consumer electronics offerings, such as PSPs and PDAs, further pushing industry development.