Japan's Sharp increases outsourcing to Taiwanese IT suppliers

Taipei, Jan. 24, 2005 (CENS)--Recently, Asustek Computer landed contracts to build light-type notebook computers and Delta Electronics acquired orders to build 56-inch rear-projection televisions for Sharp of Japan, suggesting the Japanese household-appliance supplier is increasing outsourcing to Taiwan.

According to Taiwanese industry insiders, Sharp delivered Taiwanese suppliers contracts for the two of its core products for the first time considering Taiwan's manufacturing advantages that could help it gain more overseas market shares.

The Sharp order came to Asustek in the wake of similar contracts from Epson and Hitachi over the past two years. Sharp contracted Asustek, currently the world's No. 1 supplier of computer motherboards, to make its branded 12.1-inch notebook computers, which are numbered about 30,000 systems in the single contract.

For a long time, Sharp has preferred to make its advanced versions of notebook computers in-house instead of farming them out to built-to-order suppliers for fears that contract suppliers may hurt the brand image of its advanced notebook computers, which now account for around 60% of its notebook-computer sales, if they are not qualified.

The contract to Delta signified Sharp's ambition to break into the Northern American RPTV market with competitive wares. Delta received the order following similar orders from Vivitek and Gateway.

Sharp is now the world's largest supplier of liquid-crystal display TVs. Taiwanese insiders estimated its entry into the Northern American market of the TVs in bigger sizes than 30 inches measured diagonally would stimulate another round of intensive competition in the market and likely shake Samsung's dominant 60% share in Northern America.

Sharp is expected to soon deliver Asustek orders for another two types of 12.1-inch notebook computers and orders for a type of 10-inch ware, which the two companies have discussed about for a while.

Sharp has planned to roll out 65-inch RPTVs in May and two new models next half this year after introducing 56-inch products this March. Its 56-inch wares will be made at Delta's factory in Mexico, the southernmost end of the Northern American market.