Yageo to build networking/communication component R&D center in China

Suzhou, April 14, 2004 (CENS)--Taiwan's Yageo Corp., a leading passive electronic component maker, has decided to set up an R&D center in Suzhou, Jiangsu Province, mainland China this year.

Alan Lee, general manager of Yageo Electronics (China) Co., Ltd., announced the decision at a recent campaign activity held in Suzhou, in which over 170 representatives of institutional investors, suppliers, clients and media participated.

According to Lee, Yageo's scheduled Suzhou R&D center will cooperate with big international companies such as Motorola and Alcatel to develop key components for networking/communication applications. With established resources in mainland China, Lee added, Yageo also hopes to ally with other possible partners, including Hewlett-Packard Co. (HP) and IBM, to develop some key components.

Yageo currently runs three R&D centers worldwide, including Taiwan, Japan and Netherlands; as well as seven shipment warehouses. The new R&D center would concentrate on networking/communication products, Yageo said.

"As the global passive component industry is poised to rebound, we anticipate a 12%-17% annual sales growth for multi-layer ceramic capacitor (MLCC) products and 10%-15% for resistor ®-chips this year," said Lee. "The mainland China is the world's fastest growing market with an annual increase of 20% to 25% in demand for passive components in the next three years, especially those for notebook computers, handsets, motherboards and consumer electronics sectors. We will continue to leverage our total passive component solution services, strong presence in China and cost leadership to boost Yageo's global market influence."

The general manager also claimed that whoever takes the lead in the huge mainland market in the coming three years will win the global market.

Yageo also announced that its monthly output has hit a new high at its Suzhou plant with R-Chips breaking the level of 12 billion pieces and MLCCs reaching the goal of one billion pieces.

Yageo claimed that it has become the world's No. 1 maker of R-ships, with its monthly production capacity far outpacing eight billion pieces produced by the No. 2 Rohm. In mainland China, Yageo said, its R-chip market share is expected to rise to 40% by the end of the year from 35% for the moment, making it the largest supplier of such chips in the huge market.

Yageo inaugurated a new automatic MLCC production line at the company's plant in southern Taiwan's Kaohsiung. Currenlty, the Kaohsiung plant has a monthly capacity of one billion MLCCs and the volume is expected to grow to about two billion by the end of the year.

Yageo currently accounts for about 15% of the MLCC supply in mainland China, making it the No. 3 such supplier there. The Taiwan company expects its ranking in the market to rise to No. 2 with a 20% share within this year. Yegeo is planning to set up a new MLCC plant complex in Suzhou, which is scheduled to be constructed in the second half this year and completed in next year.

At Yageo's big-scale propaganda activity, some passive component makers said that Yageo is trying to resemble Intel's brand marketing strategies to make most consumers better understand that the company's products are key components for different information technology (IT) and consumer electronic products.

Though Yageo's technologies are not the most advanced of its kind, a strategic partner with Yageo said, the company's image as a leading supplier of both R-chips and MLCCs is attracting more and more international partners to cooperate with it.