Appreciating Yen Drives International Buyers to Turn to Taiwan for Components

Appreciating Japanese yen is driving international big-name suppliers to leave Japan for Taiwan for components, with Taiwanese suppliers of connectors, handset keypads, LED, quartz components and digital cameras benefiting most.

Nokia Chief Finance Officer Rick Simonson recently said his company would reduce outsourcing of Japan-made components in reflection of the 32 percent value surge of Japanese yen against euro over the past six months.

The yen appreciation has prompted Apple to increase orders to Cheng Uei Precision Industry Co Ltd for connectors. P-TWO Industrial Inc has recently secured verifications from Sharp and Sony on its connectors for LCD TVs after landing the orders from South Korean LCD TV makers.

LED chipmaker Epistar Inc has recently landed increased orders from non-Japanese contract buyers. Epistar executives pointed out that an appreciating yen against Taiwanese dollar will definitely strengthen Taiwan`s competitiveness. Handset-keypad maker Silitech Technology Co has been rated higher by foreign institutional investors for increased Nokia orders to it. Institutional investors estimated Nokia`s orders to account for 24 percent of Silitech`s sales this year and even 31 percent next year, an increase from 2008`s 16 percent.

Well Shine Technology Co Ltd has recently won contracts from LG for AC power cords. The yen appreciation has enabled TXC Corp of Taiwan to raise market share in quartz-components market, which has long been dominated by Japanese suppliers.

Industry watchers pointed out that South Korean contract buyers have increased outsources to Taiwan on ground of deepening value loss of won, which makes their procurements from Japan disadvantageous by cost counts.

Appreciating yen has also pushed Japanese big-name suppliers to seek non-Japanese contract suppliers for components.

Altek Corp, a leading Taiwanese digital camera maker, estimates the yen appreciation to inspire Japanese contract buyers to place more orders with Taiwanese suppliers.

Source: CENS