Taiwan Outsourcing Reaches $66 Billion

With a majority of the top 20 procuring firms turning to Taiwan for information technology products, the 2005 market was valued at $66 billion according to THT Research.

"Notebook computers and handsets continued to drive Taiwan procurement, while TFT-LCD and LCD TV panel orders showed a significant rise," explains YD Gordon of THT Research, a Chicago-based firm providing research and information on global information technology contract manufacturing. "The top procuring firms (with over $2.5 billion in procurement) in 2005 were Hewlett-Packard, Dell Inc., Lenovo, Sony Corp., Apple Computer Inc., Toshiba and NEC Electronics."

Some companies showed significant increases in outsourcing including Apple whose procurement totaled $3.9 billion in 2004 and $5 billion in 2005. Dell is expected to reach $12 billion in 2006 as compared to $10.2 in 2005. Hewlett-Packard grew from $16 billion in 2003, to $19.5 billion in 2005 and is expected to reach $22.6 in 2006. Sony purchased $6.5 billion in 2005 and is expected to reach $6.9 billion in 2006.

"Another interesting trend is the increasing independence of the China manufacturing arms of Taiwan companies -- and the pressure this is putting on managers at headquarters in Taiwan," stated Gordon. "This year R&D decisions will increasingly be made by China offices and within a couple of years financial decisions will begin to be made there too.

THT Research