Yageo Unveils Ambitious Market Share Goal

Taipei, Feb. 22, 2006 (CENS)--Passive-electronic device maker Yageo Corp. projects that it will become the world' s No.2 supplier of monolithic ceramic chip capacitors (MLCC) this year after drawing up a plan to expand its share of the world market to 20% by the end of this year from its current 15%.

The company' s chief executive officer (CEO), David Huang, recently vowed to lead the company past TDK Corp. and Taiyo Yuden Co., Ltd. Of Japan as the world' s No.2 supplier of MLCCs, thereby trailing only Murata of Japan. Huang also said his company would boost its share of the world market for chip resistors to 35% this year from its current 30%, securing the No.1 position in the market.

Huang pointed out that his company' s recent acquisition of Compostar Technology Co., Ltd. Had already begun pumping revenue into Yageo. He added that he had not seen signs that the world market for passive-electronic devices would decline, considering the recent emergence of products that employ the devices including Intel' s Duo microprocessor platform for notebook computers, third-generation cellphone handsets, iPod music players, LCD TVs, and game consoles such as the Xbox360 and PSP3.

A Duo-compatible notebook computer needs at least 800 chip resistors and the same amount of MLCCs, compared with 500 resistors and 500 MLCCs in a Pentium 4 computer. A 3G handset is estimated to need an average of 240 chip resistors and 240 MLCCs, compared with an average of 150 resistors and 150 MLCCs in a 2G phone.

Industry watchers estimated that Yageo' s annual revenue would increase to NT$20 billion (US$625 million) this year from last year' s NT$16.6 billion (US$518.7 million). The company itself projected earnings to double this year from last year' s NT$325 million (US$10.1 million).

Matching its ambitious market goals, the company will spend NT$1 billion (US$31 million) on expansions this year, up from last year' s NT$900 million (US$28 million). Output of 0201-type chip resistors from its factory in Kaohsiung will be boosted to 1.5 billion units a month from 600 million units, while MLCC output will be increased to one billion units a month from 400 million units. Yageo' s factory in Suzhou, mainland China is projected to run at full capacity by the end of this year.

The Yageo CEO pointed out that his company would not make expansions without reason, and said its projected expansions would mostly aim at producing small but high-capacity products. He analyzed that compared with the overheated market in 2000, the latest boom appeared to be more orderly, making the market more predictable.

Huang said his company would also make some acquisitions this year as part of its expansion plan.