BRING ON THE ORDERS

Tatung landed orders from Media-Saturn Group for LCD TV

Tatung will supply Media-Saturn Group with LCD TV and shipments of 60-70k units will start in the 2Q2008. Media-Saturn is the owner of Media Market and Saturn chain iof consumer electronics stores.

AUO to ship 46-inch LCD TV panels to Sony

AUO will be shipping 46-inch LCD TV panels to Sony aside from the orders it received from the latter for 40-inch TV panels last April, 2007. Previously, Sony's 46-inch LCD TV panels were being supplied by S-LCD, a JV between Sony and Samsung Electronics from its 7G plant. AUO has already started its mass production of the 46-inch LCD TV s at its 7.5G plant since Feb. 2007. At present, AUO is now shipping 20-, 26-, 32-inch, 40-inch and 46-inch TV panels to Sony.

Zyxel to supply Sprint Nextel with WiMax CPE products

Zyxel will provide Sprint Nextel with WiMAX CPE products. These WiMAX CPE products  support 802.16e Wave 2 standard and include Zyxel's MAX-100 series PC MCIA cards and the MAX-200 series plug-and-play routers which will enable Sprint to deliver last mile wireless broadband access to customers as an alternative to cable and DSL.

Acer orders graphic cards from MSI

MSI will supply Acer with graphic cards and this is projected to boost MSI's graphics card shipments in August to1M units. With orders coming in from Acer for graphic cards and from HP and Dell for motherboard, MSI will likely to achieve its 28M motherboards and graphics cards shipment goal this 2007.

TSMC will produce embedded DRAM chips for Microsoft’s X Box 360

TSMC will be supplying Microsoft with embedded DRAM chips made using TSMC’s 90nm technology for its game console X Box 360. TSMC has been producing 90nm embedded DRAM since 1Q2006 and has developed versatile sets of memory macros used in more than a dozen 90nm customer products.

Dongbu HiTek will be producing SRAMs for EMLSI

Dongbu HiTek Co. Ltd. will be producing low-power SRAMs for Emerging Memory & Logic Solutions Inc. (EMLSI). It will produce 8 MB /3V SRAMs for mobile handset applications and will create devices based on 0.18- to 0.15-micron geometries. They are also planning to shift other popular SRAM solutions like 2 MB /3V and 4 MB /5V devices, to the finer 0.15-micron processing node in the near future.

Sony NB orders

Wistron has received NB orders from Sony with shipments of 500K units to begin 4Q07.  This is Wistron's first notebook order from Sony.

COMPANY NEWS AND INDUSTRY TRENDS

STMicroelectronics plans to close down 3 manufacturing plants

STMicroelectronics will close 3 of its manufacturing operations: 1) its 6-inch wafer fab in Carrollton, Texas; 2) its 8-inch fab in Phoenix, Arizona; and 3) its back-end packaging and test facility in Ain Sebaa, Morocco. Operations in these fabs will be transferred to some of its less expensive 6-inch fabs in Singapore or to its 8-inch facilities located in Asia and Europe. STM is expected to save more than US$150M annually.

Everlight to Invest in Tekcore

There are speculations that Everlight Electronic will invest in Tekcore. Tekcore is seeking strategic partnership and is planning to expand its production capacity. It intends to raise funds of NT$300M and to issue convertible bonds worth NT$600M.

Sprint Nextel US$5B Development Plans

Sprint Nextel intends to develop a large-scale, advanced wireless broadband network designed to mobilize the Internet, bring wireless innovation to devices and deliver new multimedia mobile applications to customers. This development is expected to cost Sprint Nextel US$5B to build up its WiMAX broadband network and service through 2010.

Applied Materials purchased BOC Edwards' business

Applied Materials has purchased BOC Edwards’ semiconductor equipment parts cleaning and refurbishment business for its service expansion for undisclosed sum. The transaction includes Kachina's operations at facilities in Austin, Texas; Phoenix, Arizona; and Hillsboro, Oregon, as well as Kachina's on-site service operations at customer sites in Israel, Ireland and the state of Virginia and will be integrated within Applied Global Services organizations. Presently, Applied owns and operates parts cleaning service facilities throughout North America and in Europe, Israel, Taiwan, Singapore and China.

Spreadtrum and ZTE signed a strategic partneship

Spreadtrum, a developer of baseband chipsets, has signed a TD-SCDMA strategic partnership agreement with ZTE, a systems house. Both companies intend to improve the functionality of TD-SCDMA system and terminals and introduce additional TD-SCDMA commercial products.

TSMC will buy 11% additional shares in Vanguard

TSMC will purchase an additional 11% shares in Vanguard Semiconductor Corp amounting to NT$5.55B (US$168M), or NT$29.7 per share via bloc trade in order to meet the increasing market demand for 8-inch wafers. This transaction will make TSMC's share in Vanguard go up to 37.8% from 26.8%.

Tatung will invest in WiMAX

Tatung is planning to invest NT$1.1B (US$33.2M) in its telecom subsidiary by issuing 110 million new shares in order to raise finance for the construction of a new WiMAX network. Tatung Telecom was founded this year with NT$100M in capital and is one of six companies that won a WiMAX license in an auction last month.

Macronix-IBM deal extended for another 3 years

Macronix signed an agreement with IBM extending its contract for another 3 years developing chips used to store data in consumer electronics devices. The agreement became effective on July 22 and will end on Jan. 21, 2010.

TSMC will build a $59.8M 300-mm wafer-level packaging technology

TSMC will be spending $59.8M to build a 300-mm wafer-level packaging technology to meet increasing market demand. This wafer-level packaging technology can effectively reduce the size of end-products and elevate TSMC’s competitiveness and increase its customers. Also, TSMC will appropriate $22.8M for upgrading a monthly capacity of 12,600 eight-inch wafers in 0.18-micron logic process to 11,100 eight-inch wafers capable of high voltage, radio frequency (RF), and BiCMOS processes.

Teco to purchase 3.5% shares in Syntax-Brillian

Teco is planning to purchase 3.5% share of Syntax-Brillian for US$20M. Teco’s share closed limit-up at NT$17.20. It has dropped 1.72% this month but is up 0.59% since early 2007. This partnership would mean that Teco will be working with Kolin Co., the company’s competitor in Taiwan who has an 8% share in Syntax-Brillian. The 3 companies are expected to share resources including manufacturing, design and production, to bring local LCD television brands to overseas markets. However, this partnership could also mean an increased product competition from Vizio, a brand from Amtran which is widely known in the North American market.

Acer to acquire Gateway

Acer has announced that it will acquire Gateway and it would likely affect the company's ODM and parts makers. The merger and some major changes are not expected to be completed until the end of 2007 since Gateway's 2007 notebook and parts orders have already been placed. This event, however, has prompted Compal Electronics, one of Acer’s major notebook ODMs, to create a new division that will focus on landing possible orders from Acer. Presently, Compal, Quanta Computer and Wistron are Acer's major notebook ODMs. Gateway places its orders with Arima Computer. The additional notebook sales after the merger are expected to benefit the three Acer’s ODMs.

Shanghai Port to become world's busiest

With exports growing rapidly, next year Shanghai is expected to surpass Singapore as the world's busiest port. It already surpassed HK to become #2 in 1Q07, with containers handled up 28.1% YoY.   In 1H07 the port processed 5.9 million 20-foot equivalent units (TEUs).

CHINA

Trade between China and Taiwan increased by 13.3%

Indirect trade between Taiwan and China in the six months to June rose 13.3% from the same period last 2006 to US$46.49B. This figure includes the following: Total External Trade rose to 21.4% from 20.1%; trade surplus with China is US$20.21B up by 11.6%; Exports increased by 12.8% to US$33.35B; Imports were up by 14.7% at US$13.14B; 6-month shipments to China accounted for 29.3% as compared with 27.9% last year; and imports from China is made up of 12.7% of total imports, up from 11.7% last 2006.

Gateway entered China PC market

Gateway has begun selling computers in China through distributor Digital China Holdings Ltd.  Gateway hasn't introduced special models for the China market beyond minor modifications such as keyboard language.

INTELLECTUAL PROPERTY DISPUTES

LG to sue Hitachi

LG plans to file a counter-suit against Hitachi, claiming that it infringed on LG's plasma display patents.

CLEANTECH

Yingli Solar goes public in US

China's solar energy industry is going global.  On June 8th Yingli Solar, a manufacturer of silicon ingot, solar cells, solar modules and PV systems, went public on the NYSE at 11USD per share.   Yingli's move followed similar moves by China Sunergy (NASDAQ) and Jiangxi LDK (NYSE) earlier this year.

M & A

Matsushita looking for buyer for JVC: Kenwood?

Matsushita Electric Industrial and Kenwood Corp are discussing the acquisition of JVC by Kenwood.  Matsushita was also discussing a sale of JVC to TPG recently.