Taipei, July 23, 2008 (CENS)--Nokia buyers have been visiting Taiwan component suppliers more frequently than before because the handset giant wants to buy cheaper components, mostly display panels and drive chips.

Taiwan industry watchers believe that the world`s No.1 handset supplier needs more cheap components for its mobile phones in hopes of keeping its 40% dominance of the world market. Nokia estimated in a recently released statement that its 2008 shipment would likely increase at least 10% from last year.

Based on such projection, industry watchers estimate Nokia to buy as many as 200 million display panel sets from Taiwan suppliers throughout this year and 300 million sets next year.

Nokia`s contract suppliers of such panels in Taiwan include AU Optronics Corp. (AUO), Innolux Display Corp., Toppoly Optoelectronics Corp., and Wintek Corp. AUO mostly supplies thin-film transistor (TFT) type of liquid-crystal display whereas Wintek specializes in color super-twist nematic (CSTN) type. Innolux is shifting to TFT type from CSTN type. Toppoly makes low temperature poly si (LTPS) type.

In drive IC procurement, Sitronix Technology Co., Ltd. and OriseTech Co., Ltd. have been Nokia`s suppliers of CSTN drive ICs. Novatek Microelectronics Co., Ltd. has begun supplying it TFT drive ICs this year. Although some industry watchers think Novatek`s joining the supply chain would lure orders from other suppliers, Sitronix` executives recently said the company`s 2008 shipments would increase sharply from last year`s.

Industry watchers estimate Taiwanese display-panel suppliers to fill 40% of Nokia`s need this year and 60% next year. AUO and Novatek, with unmatched production scale and technological capability in Taiwan, are seen to mainly benefit from Nokia`s increased need for low-priced components.

Some institutional investors expect Nokia`s increased outsourcing to Taiwan to prompt rivals as Samsung to do likewise to minimize competition.

Taiwanese display-panel makers point out a side-effect of Nokia`s outsourcing surge is spiking prices of various commodities, which have jacked up production costs for various industries, as well as forcing Japanese component suppliers out of the market.

(by Ken Liu)