TXC, Siward acquire crystal component production lines

Taipei, Jan. 16, 2003 (CENS)--Taiwan's TXC Corp. and Siward Crystal Technology Co. recently decided to acquire production lines or equipment from major foreign companies in order to expand their market base.

All of the top-three quartz crystal component makers in Taiwan, including TXC, Siward and Aker Technology Co., Ltd., suffered losses last year due to an unfavorable global business climate.

TXC and Siward decided to procure production lines or technology from crystal component suppliers in the U.S. and Japan that are planning to close or streamline plants.

To further expand its business in the cell phone component market, TXC recently said that it plans to acquire CTS' production technology and lines for making temperature compensated crystal oscillator (TCXO) products for under US$5 million. The Taiwan company is scheduled to begin mass production on the newly acquired lines in the second quarter this year and to generate profits in the second half. TXC expects to have revenue of about NT$2 billion (US$57.8 million at US$1:NT$34.6) this year.

TXC said that CTS is a leading global supplier of crystal components and a contract customer of TXC. By acquiring CTS' production lines and technology, TXC said that it is expected to become a component supplier to Motorola of the U.S., though the cell-phone giant will need to certify TXC's facilities again.

TXC also said that construction of a new plant in Ningbo, Jiangsu Province, mainland China, is scheduled to be completed by late March and begin volume production in the second quarter this year. The company currently produces lower-end DIP-type crystal units in Ningbo, and the new plant will produce SMD products transferred from the company's Taiwan plants. TXC also plans to set up a new branch office in Shanghai, mainland China to handle business in the north China region.

Siward recently acquired crystal unit production equipment, technology and customers from JVC, a leading home appliance maker in Japan. Siward claimed that orders from JVC's crystal component customers are expected to gradually come after March this year.

Industry sources said that about 90% of the global crystal component supply comes from Asia, with Japan and Taiwan currently accounting for 75% and 7%, respectively, of the global supply. The sources added, however, that more and more orders are flowing to Taiwan suppliers. For example, Siward has recently won orders from both Quanta Computer Inc. and many major foreign brands, such as Motorola, JVC and Apple Computer.

Siward acquired the quartz crystal division of Japan's Meiden Tsushin Kogyo Co. and set up a Japanese subsidiary in 2000. Siward said that the Japanese subsidiary is expected to breakeven this year while its Taiwan operation is expected to have revenue of about NT$800 million (US$23.12 million), up 50% from 2002. The company said that the greatest part of the growth momentum comes from new customers in information technology industries, such as notebook PC makers.