Taiwan Companies Plan to Merge, Consolidate
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As Taiwan companies plan to enter the China market, more
are giving serious thought to merging so that they can
be more competitive in China, and internationally.
This trend is especially clear in electronic component
and systems manufacture. Most Taiwan companies have acted
as OEM (original equipment manufacturers), serving as
manufacturers for other companies. This helped them by
leaving marketing costs to the buyer, while the Taiwan
companies focused on efficient cost management for manufacture.
However, this has changed with Taiwan and China joining
the WTO (World Trade Organization). While virtually all
Taiwan companies have relocated some or all of their manufacturing
to China, there is always someone else who is willing
to manufacture for less. And, the Taiwan market is open
to competition from other foreign brands. Three other
factors have contributed to the change in attitude. Taiwan's
stock market has risen this year, which has raised the
desire for owners to sell their businesses. The Taiwan
government has lifted many business restrictions, and
foreign capital is welcome without restrictions. And,
most importantly, joining WTO has meant that the market
has become much more competitive as enterprises become
more trim and efficient.
Right now, it is believed that makers of TFT-LCD displays
are ripe for consolidation as they poise to raise their
output. The most likely targets are companies which are
under-capitalized, and have trouble finding financing
for expansion.
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