Nortel to Increase Outsourcing in Taiwan

Telecom-equipment supplier Nortel Networks Corp. will buy NT$8 billion worth of equipment in Taiwan this year, 15-20 percent more relative to last year, according to the company President for the Greater China Operation, Jackson Wu.

Globally, the Toronto, Canada-headquartered company has increased outsourcing at annual rate of 10-15 percent, to $7 billion last year. The company`s Taiwan branch said the company procured around $200 million of products in Taiwan last year.

Its Taiwan-based contract suppliers include Zyxel Communications Corp, Delta Electronics Inc, GemTek Technology Co Ltd, Accton Technology Corp, Quanta Microsystems and Hon Hai Precision Industry Co Ltd.

This year, the company has added MediaTek Inc, Taiwan`s No.1 fabless house, to its WiMAX suppler list and given IP-phone orders to Wistron Corp. Quanta and Zyxel have begun shipping consumer premise equipment (CPE) to Nortel.

Executives of Nortel`s Greater China operation pointed out that the company had long depended on Beceem and Sequans for WiMAX chips, suggesting MediaTek`s entry into Nortel`s supply chain represents the Taiwanese chip designers had successfully snatched up a spot in global WiMAX market.

Nortel opened its Asian operation headquarter in Shanghai last year. In the meantime, the company has adjusted its international procurement policy, putting its Asian international procurement office in Shanghai and increasing outsourcing to Asia.

Wu said his company`s technological focus for this year would be fourth-generation (4G) wireless and had chosen WiMAX and LTE as pivotal technologies to develop. His company is now seeking LTE-chip suppliers.

Nortel Taiwan`s executives pointed out LTE chip would be an integral component for portable devices that deliver streaming audio and voice. The products include mobile phone, global positioning system (GPS), network cards, and handheld devices.

Source: CENS