02.21.2001
Orders galore for Taiwan handset makers

• Following the example of Motorola and Ericsson which outsourced more handset orders to Taiwan earlier this year, major European handset makers including Nokia, Siemens, Alcatel and Sagem are also sizing up the island as a potential source for handset supply.

• Rumour has it that Quanta (2382 'Guang Da') has secured ODM handset orders from Nokia and that it is also in talks with Alcatel and Sagem. Quanta will not confirm the rumours, though we believe Quanta's strong research team and solid track record in production makes it an ideal candidate for such orders.

• It is also heard on the grapevine that Hon Hai Precision (2317 'Hong Hai') is in line for an OEM handset contract with Nokia. We see the chances of this as high, given that Hon Hai is Nokia's connector supplier.

• Siemens has very recently been in talks with Quanta, Compal (2324 'Ren Bao') and Arima (2381 'Hua Yu'). We see the prospects for Taiwan handset makers achieving their goal of shipping 47m handsets in 2001 as improving. Gross margin on handsets is only 10-12%.

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