Apr. 02, 2001

Yageo Corp., an aggressive Taiwan-based component concern announced last week that the firm would acquire oter international active component manufacturers in order to pave the way for it to rank as one of the major active, passive component manufacturers within three to five years.

Yageo acquired a passive component department of Philips in 2000. The local passive component giant expects to eventually offer a one stop shopping service by acquiring other active component manufacturers in the line, if possible.

The R-chip is regarded as the ripe product in the market. It is a must for firms to upgrade their production capacities in order to reach economics of scale and economic potential as well, executives of Yageo explained in Taipei.

Over the pas three years, Yageo had upgraded its chip production capacity by about 50% per year. But this increase in output had not been met by increased orders as clients are comparably limited worldwide.

The above situation has however changed since Yageo acquired the passive component department of Philips last year. Several international CEMs (contract equipment manufacturers) such as Flextronics and Selection of Singapore and Hewlett-Packard have become clients of Yageo.

Meanwhile, Yageo's product structure is also expected to change following the acquisition of Philip's passive component department. For example, Yageo’s passive components for PCs and peripherals are expected to decline to 40% of its product ratio within the year, thus weakening the effect of the worldwide slide in PC demand.

In line with its internationalization effort, Yageo will also sell all if its non-business investments in real estate to concentrate on its goals to rank as the world's fourth largest passive component manufacture in 2001, following Mura, TDK and AVS.