02.16.2001
Handset makers looking to three-fold production increase in 2001

• Major handset manufacturers have released production targets for 2001 based on expectations that more outsourcing contracts will come Taiwan's way. Total handset production in 2001 is predicted to be around 47m, three times higher than in 2000.

• We are doubtful that this is a realistic target, as production will depend heavily on the success of the supposedly cheaper and faster broadband GPRS phones, which is by no means guaranteed.

• DbTel (5404 'Da Ba') touts the highest handset production target at 16m units. The company is confident that switching to ODM from OEM for Motorola's outsourcing contracts, launching own brand handsets in China and Taiwan and providing Surface Mount Technology (SMT) services for Motorola will lead to a surge in production.

• We are again doubtful that DbTel can achieve this target given its lack of experience in ODM and the difficulty of making a successful launch of its less well-known handset brand in China.

• Acer Communications and Multimedia (ACM, 2352 'Ming Ji') and Arima Computer (2381 'Hua Yu') come in second place in the target ratings with production expected to top 10m units. Compal (2324 'Ren Bao') and GVC Corp. (2322 'Zhi Fu') are less aggressive with targets of 5m and 2m, respectively.

BennyLo@Primasia.com +886-[0]2-2547-8869