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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Dr. Mitchell R. White who wrote (50172)	8/3/2001 3:54:26 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Digital camera makers thrive amid PC slump By Reuters August 3, 2001, 10:35 a.m. PT TAIPEI, Taiwan--While much of Taiwan's once-thriving electronics industry continues to founder amid a global downturn in computer demand, the island's digital camera makers are fixing their focus on skyrocketing exports. According to Taiwan's Institute for Information Industry, the country's digital camera production is likely to reach 10.5 million units this year, a surge of 86 percent over last year. It is also expected to record a 147 percent jump in value to $1.41 billion. The island already accounts for some 30 percent of global production of digital cameras in terms of volume--most of which occupy the very low end, both in terms of technology and profit margins. Still, Taiwan companies are well placed to benefit from the global popularity of digital cameras, say analysts. Taiwan manufacturers could capture up to half of the world market by 2005, said Yvonne Chen of the Institute for Information Industry, adding that the "outlook is bright as Taiwan gradually enters higher-end production of digital cameras." Taiwan manufacturers, which are now good at making low-end 350,000-pixel and 1.3 million-pixel digital cameras, are expected to gain another 45 percent annualized growth in the terms of value of output next year. A pixel is a single point in a graphic image. The more pixels in a given area, the clearer the image. "Taiwan's digital camera industry is bucking the overall economic slowdown and is expected to enjoy another three to five years of prosperous growth," said Michael Fang, a fund manager at AIG Securities Investment. The high growth in digital camera sales contrasts sharply with the 12.3 percent fall in Taiwan's electronic exports in the first half of 2001 from the same period last year and the 14.1 percent decline in exports by the IT and telecommunications sector, Taiwan's two most globally competitive industries. However, profit margins are slim at the lower end of the market where most Taiwan digital camera makers now prevail. Nomura Securities analyst Frank Lee said Taiwan makers have difficulty in producing higher-resolution digital cameras--the high-end retail cameras with 3 million pixels or above. "The Japanese companies still control it (high-end digital camera production) and are not likely to outsource it in the near future because (profit margins are) still quite high," Lee said. Lee said once the products have reached a more mature stage--"in two to three years"--Japanese companies will outsource more and turn to Taiwan, which is very good at commercializing consumer technologies. Currently, there are 13 digital camera makers in Taiwan, including leaders Premier Image, Primax, Acer Communications and Multimedia, Mustek Systems and Teco Image. Premier Image is one of the world's largest producers of digital cameras, with contract clients such as Fuji Photo, Nikon, Olympus and Konica. The company expects to churn out 1.2 million to 1.3 million digital cameras this year, doubling last year's output of 600,000. Chen said 90 percent of Taiwan's digital camera production is for contract manufacturing of low-end products, while own-brand production accounts for only 10 percent. Taiwan players could improve profit margins by producing cameras with higher pixel counts and by integrating cameras with other devices such as MP3 players, handheld computers and mobile phones, Chen said. "It would be a big advantage," she said.