Players in the Taiwanese mobile phone components industry have been aggressively setting up factories in China this year, managing to increase orders while steering clear of the investment restrictions that the Chinese government implemented starting in April. Green Point recently announced that it would increase investment in a second factory in Tianjin, bringing a 30% expansion of production capacity at a total investment of US$13 million. Meanwhile, monthly production capacity for Compal's Nanjing factory has reached 800,000 units, with the potential to reach one million units by October.

 

Inventec is also actively strengthening its foothold in China, with construction of a new factory in Shanghai and a second factory in Nanjing scheduled to finish by the fourth quarter of 2005. When construction is complete, Inventec's operational space will increase by four-fold. Since its current production capacity is already overstretched, Inventec has leased factory space in Pudong near the site of its future plant in order to respond to the demands of the busy season.

 

Green Point's Board of Directors recently approved a measure that invests responsibility for the manufacture and development of product castings, mobile phone shells, and other plastic components with its Tianjin subsidiary. With a newly authorized US$8 million in additional funding, the forecasted size of the investment for Green Point's second Tianjin factory has now climbed to US$13 million. The facility has been designed mostly with the needs of Motorola and Sony-Ericsson, Green Point's two largest clients, in mind. Both Motorola and Sony-Ericsson have their operations situated in Northeast China, prompting Green Point to authorize the new factory, as well as increase funding for the current facility in Tianjin by US$4.5 million to a total of US$9.6 million.

 

Compal's Nanjing factory opened production lines in the second quarter of 2004, but output didn't begin to take off until September. Compal's volume for September soared above one million units, with the Nanjing factory accounting for 80% of total volume, or more than 800,000 units. Currently, the Nanjing factory is only using 25% of its operational space. They expect to use twice as much space by the first half of next year, and once half of the total space is in use, the management will assess future plans. Compal presently has only a small R&D team working in Nanjing; primary R&D will remain in Taiwan.