Dec. 10, 2001

The Industrial Technology Information Service, a think tank of Taiwan's Ministry of Economic Affairs, submitted its prognosis for Taiwan's industrial development in the next few years at a seminar on the current state of technology in Taiwan's industries.

ITIS pointed ot that Taiwan's optical communications industry shrugged off negative grwoth in the global optical communications market this year to deliver an output value of NT$14.2 billion ( approx. 34,5 NT$ to 1 US$ ), up 27.6% from 2000. An ITIS analyst said that a large number of manufacturers moved into this market last year, and that its growth was led mainly by thin-film filters and transceivers.

Quite unlike other sectors of the Taiwan ITC field, at present Taiwan's optical communication output value accounts for only 1.3% of the global market, indicating that local companies have a long journey ahead of them if Taiwan's optical communications industry is to become a major global player.

86% of Taiwan's total optical communications output value are components. Within this sector, optical fibers and optical cables account for the largest share, followed by passive devices and active devices- Thin-film filters reported the fastest growth.

As many optical communications-related companies are still in the trial production phase this year, a rise of 43% is strongly expected for 2002, when the production lines are in full swing. Optical communications equipment will enjoy quick development in 2002, ITIS said, especially due to the higher popularity of optical Ethernet.

Besides communications equipment, the ITIS analysis said that array waveguide grating (AWG) products, including AWG chips, V-groove chips and fiber arrays would also be rising stars, as several companies at different levels have moved into this market.

Alarmed by the glutted market as the result of an excess of manufacturers, and the fallout of the Sept.11 incident, the global optical communications market performed weaker than expected this year. ITIS forecast that Taiwan's optical communications industry will enjoy an overall growth of 56% in 2005, after global inventories piled up now are completely digested in the first quarter of 2003.

As the Sept. 11 terrorist attacks have had little effect on Taiwans' communications industry, its output value is expected to a record growth of 27.9% next year, of which the wireless communications industry will account for the largest share. As a result of receiving major orders of low-value handsets for several cellphone giants, the wireless communications industry of Taiwan is expected to increase its output by 56% next year, albeit with low profit margins.

The quick growth of wireless communications devices and broadband networking access devices is another key factor in increasing Taiwan's output value on the communications front.