China's Top Telecom Equipment Maker to Increase Procurements from Taiwan
2011/05/17 | By Steve ChuangTaipei, May 17, 2011 (CENS)--To challenge the title as the world's largest telecom equipment supplier, China-based Huawei Inc. is going to increase its procurements from Taiwanese partners.
The firm spent RMB185.2 billion on outsourcing last year, and is expected to raise the budget to an estimate of more than RMB200 billion (about NT$880 billion at RMB1: NT$4.4) this year.
Aiming for the top spot in the global market for telecom equipment, Huawei has planned to reinforce its cooperation with Taiwanese suppliers by increasing its purchases of end-user devices, network equipment and related parts valued at over NT$100 billion this year. Accordingly, the firm will also add tablet PCs, IP (Internet protocol) TVs and cloud computing-based devices to its procurement list.
In addition to Foxconn Group, more than 20 Taiwanese enterprises, including Chimei Innolux Corp., (display panels), Cheng Uei Precision Industry Co., Ltd. (connectors), Delta Electronics Inc. (power supplies) and Wistron Corp. (electronics) will benefit from Huawei's increasing procurements.
Taiwanese network device producers, like Prime Electronics & Satellitics Inc. and Alpha Networks Inc., and IC (integrated circuit) designers and component suppliers, such as Ralink Technology Corp., TrendChip Technologies Corp. and Universal Microwave Technology Inc., will also take a slice of the business pie.
Mainly focusing on business with telecom firms, Huawei is also stepping up exploring the enterprise and end-user device segments to achieve sustainable business growth, aiming to double its shipment of handsets to 60 million units this year. This has prompted the Chinese firm to expand the categories and volumes of purchases from Taiwanese suppliers, noted market observers.
With overseas sales sharply surging 33.8% year-on-year, Huawei scored sales incomes of over RMB185.2 billion to rank as the world's second-largest telecom equipment supplier last year. Noteworthily, the firm has also applied for setting up a subsidiary in Taiwan, and will consider locating its procurement center or R&D center on the island to handle its business in Greater China in the future.
| Huawei's Sales Revenue and Procurement Budgets with Taiwan | ||||
| Year | 2008 | 2009 | 2010 | 2011 (estimated) |
| Sales Revenue | RMB125.2 bn. | RMB149.0 bn. | RMB185.2 bn. | RMB201.2 bn. |
| Procurement Budget | NT$26.1 bn. | NT$58.8 bn. | NT$99.5 bn. | Over NT$100 bn. |