Samsung to increase procurement from Taiwan in 2004

Dec 19, 2003 Ι Industry In-Focus Ι Electronics and Computers Ι By Quincy, CENS
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Taipei, Dec. 19, 2003 (CENS)--Samsung Electronics Taiwan recently said its has procured about US$500 million worth of products and components from Taiwan this year and the value is expected to further grow next year.

Samsung Taiwan also plans to earmark US$10 million as marketing budget to boost its share of the local market.

Samsung Taiwan president Kao Yu-tsan made the announcement on Dec. 17 when his company demonstrated several liquid crystal display (LCD) TV set models, including 15-, 17-, 32- and 40-inch models and a 50-inch digital light processing (DLP) rear-projection TV model at its new flagship store in Tianmu, Taipei. The president claimed that Samsung aims to win the No. 1 position in Taiwan's audio/video home appliance market in 2005.

According to Kao, Samsung of South Korea procures a lot of products from Taiwan per year and the annual procurement value has far outstripped annual sales of its home appliance products on the island.

Kao said that many of the key components in Samsung's home appliance and electronic products come from Taiwan, including various sizes of thin film transistor-liquid crystal display (TFT-LCD) panels. Kao pointed out that Samsung's procurement value from Taiwan would further grow next year, but he declined to disclose the exact figure.

Samsung has spent US$7 million on marketing activities in Taiwan this year and the amount will be boosted to US$10 million next year, according to Kao. The Taiwan subsidiary would concentrate on the sales channel deployment and digital TV product marketing next year, as Samsung's brand image has gradually been implanted in the minds of local consumers.

Kao claimed that Samsung Taiwan would target the high-level and –price digital TV market to seek higher profits. So, he added, his company decided to open the flagship appliance store in Tianmu to appeal to the high-income consumer group in the area. Samsung's digital TV models are priced about twofold that of similar counterparts made by local brands. The Taiwan subsidiary expects to sell 2,000 digital TV sets and 500 DLP TV sets next year.

Samsung sold about 400,000 cell phones in Taiwan this year for a 6% share of the local handset market. Samsung Taiwan claimed that its cell phone delivery volume would grow to 800,000 to 100,000 units next year, with all models to be equipped with color displays. The subsidiary added that cell phones would still be its major momentum for revenue growth next year.
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