Sept. 2, 2002

Sony Corp. Of Japan estimates its annual procurement of Taiwan-made semiconductor products will reach US$ 1 billion after it opens a planned chip R&D center here. In April this year, Sony invested the equivalent of US$44 million to set up an information product innovation R&D headquarters in Taiwan. It now plans to build an IC R&D center at an industrial park in the east of Taipei.

Some domestic IT companies are reported to compete for order worth US$ 10 billion from Sony, while one of them said that Sony could become the second largest buyer of Taiwan goods after Hewlett-Packard.

Sony recently increased orders from Taiwan-made game consoles, PDAs, and notebook computers. The company purchased for approx. US$ 1.47 billion last year in Taiwan and promised to double this figure by 2003.

Sony's production partners in Taiwan include Quanta, Asustek, and Hon Hai.

Sony has promised to increase procurement from Taiwan and the transfer of manufacturing technologies to Taiwan firms, while NEC and Fujitsu have made similar commitments.

NEC is reported to purchase for 220 billion Yen (about US$ 1.7 billion) worth of IT products from Taiwan this year, up 10% from 2001. Currently purchased top items are notebook and desktop computers., with expansion planned to include semiconductors, electronic parts, wireless telecom devices and related parts.
Further to join the shopping list are PDAs, plasma display TV sets, LCD projectors and GPRS mobile telephones.

Following the announcement of IBM to increase its procurement of IT products from the "greater China area", major Taiwan manufacturers are now racing to win orders from the American giant.

Paced with heightened market competition, IBM has confirmed a plan to lay off 15,600 employees, or 5% of the total workforce, and increase outsourcing.

IBM is expected to increase purchases of IT products from Taiwan to US$ 5 billion in 2003 from the level of US$ 3 billion this year. The company has beefed up its procurement staff in China while continuing to buy in Taiwan.