03.20.2001
MTI ties up with Chunghwa on satellite communication

• Chunghwa Telecom (2412 'Chung Hua Dian') is to team up with Microelectronics Technology Inc. (MTI, 2314 'Tai Yang') and De On Technology (unlisted) to build up its satellite communication network.

• MTI is a local leader in microwave and satellite communication equipment. We expect the tie-up to benefit MTI in terms of strong orders for VSAT equipment. Chunghwa will benefit from MTI's advanced satellite communication technology.

• Lucent has obtained a 3-year, US$5.0b contract from Verizon Wireless for communication equipment including base station. Since MTI is Lucent's major base station outsourcing partner, we expect MTI to indirectly benefit from the deal..

• Despite recent weakness on disappointing February results, we maintain our HOLD recommendation on MTI.

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