Taiwan Manufacturers Re-vamping OEM/ODM model: TaiwanHighTech Update.Business Editors/High-Tech Writers CHICAGO--(BUSINESS WIRE)--Nov. 12, 2003 With Taiwan's hi-tech manufacturing moving to China and skeptics predicting the demise of the industry, Taiwan makers are proving their resilience with new variations of the OEM/ODM model. "Hon Hai Precision Industry, Taiwan's largest privately held manufacturer, is leading the trend in pursuing international clients in (or near) their home turf," says TaiwanHighTech research analyst Ruth Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. . Hon Hai recently bought a Motorola factory in Mexico (accompanied by the promise of large Motorola orders) and is building a plant in Komarom, Hungary (near Nokia's plant) to make handset components for Nokia. Proview International Holdings is another Taiwan company taking OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and to the next step. "In the original OEM model, multinationals such as IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) outsourced production to Taiwan manufacturers. Next, companies such as Dell and Gateway bought Taiwan designed and manufactured products and sold them under their own names (ODM (Original Design Manufacturer) A contract manufacturer that uses its own designs and intellectual property (IP). See contract manufacturer. ). In OEM's latest incarnation, international companies license their brand names to Taiwan manufacturers, which take care of design, manufacturing, and sales," explains Cohen. Proview licenses Xerox and Sylvania brands for its monitors and Motorola's brand-name for its LCD monitors, flat screen televisions, and CD/DVD drives. Taiwan's government is also active in re-inventing the industry. For the past several years it has been working to transform Taiwan into a regional service, logistics, and R&D center. "The government's efforts are backed by generous incentive programs and the strength of local manufacturers. The results are very impressive," notes Cohen. Motorola is setting up a Taiwan ODM design center for mobile phones, wireless devices and broadband equipment. Networking communication IC designer Marvell Technology plans to join Intel, TI, and Broadcom in setting up an R&D center in Taiwan. HP plans to make Taiwan its logistics base for export from China and is doubling the staff at its Taiwan Product Development Center (after closing its Singapore office). Dell is shifting R&D from Texas to its Taiwan Design Center (TDC TDC Top Dead Center TDC Time-to-Digital Converter TDC Tabular Data Control TDC Total Development Cost TDC Texas Department of Corrections TDC The Discovery Channel TDC Torpedo Data Computer TDC Theater Deployable Communications ). Sun Microsystems will spend US$50M to set up a software R&D lab in Taiwan. Shipment Update: Taiwan manufacturers continue to see rising shipments as the hi-tech market bounces back. -- 4Q03 and 2003 notebook shipments (units): Quanta 4Q03E - 3.29M, 2003F 10.1M, up 74% YoY; Wistron 2003F - 2.18M (currently shipping 10,000 Gateway M500's per month); Asustek 2003F - 1.44M, up 125% YoY; Compal 4Q03E - 1.95M, 2003F 5.5M; Inventec 2003F - 1.5M. -- Motherboard shipments Oct. 2003 (units): Asustek 3.78M; ECS See eComStation. 1.75M; MSI MSI: see integrated circuit. (1) (MicroSoft Installer) See Windows Installer. (2) (Medium Scale Integration) Between 100 and 3,000 transistors on a chip. See SSI, LSI, VLSI and ULSI. 1.45M; GigaByte 1.35M; Abit .2M; Albatron .05M. -- Top LCD monitor shipments Oct. 2003 (units): AUO 1.19M; CMO CMO See: Collateralized mortgage obligation CMO See collateralized mortgage obligation (CMO). 0.94M; CPT CPT See: Carriage Paid To 0.83M; BenQ 0.4M; Hannstar 0.4M; Quanta 0.4M; Amtran 0.24M; Compal 0.2M. About TaiwanHighTech.com: TaiwanHighTech.com is an independent provider of business research and news on Taiwan's information technology manufacturers. The company provides standard and customized research reports on Taiwan to multinational customers, maintains a news web portal about Taiwan OEM/ODM, and disseminates a free e-newsletter to over 5,000 subscribers. |
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