Abstract
Though the world economy is currently mired in a slump, the performance of LAN products and the development of the market for them have shown that various type of new networking technologies and applications have expanded the scope of the LAN industry. Due to the large increase in GbE price performance ratio, 10GbE specifications are becoming standardized and metropolitan fiberoptic networks technology has become even more mature. American-based Yipes has already started providing LAN-to-Internet that transmits from 1 Mbps to 1 Gbps to various clients, such as the Securites and Exchange Commision in Chicago. This report discusses the Taiwanese LAN industry size, production value structure, global market share, business types, level of industry concentration, production bases, primary product categories, and future prospects.
Traditionally, the overwhelming majority of computer networking products entered the market via a single external connection. However, due to the rapid expansion of the application scope for computer networking, products used for network connectivity and Internet access have already started walking a path towards built-in systems products that offer direct connection. For example, the rise of LOM resulted in a compression of the market for network cards that have to be connected externally. The maturation of Southbridge chipset technology has put even more pressure on network cards.
The flow of data for LAN and WAN have traditionally been at a ratio of 80:20. However, this has changed with the advent of e-Commerce, the Internet, online games, and new network applications. LAN functions below that of pure Layer 2 must include additional applications such as packet directing, QoS, and network security. Additionally, the increase in network equipment for enterprises and households has also made it necessary for WAN products to be bundled with LAN functions, which dovetails nicely the needs of the end-user to access the Internet via a variety of different networking equipment.
Taiwanese, Chinese, and international computer networking vendors are involved in both competition and cooperation. Foreign and Chinese local vendors that concentrate on producing high-end LAN products will gradually shift order over to Taiwanese OEM/ODMs due to considerations over a complete product line and lower manufacturing costs, while they themselves reap the profits from front-end product R&D and design and back-end sales and services. Taiwanese vendors are entering into direct competition via their own-brand names for LAN products aimed at the SME and general consumer market, while competing with Chinese, Korean, and Singaporean vendors over OEM/ODM orders for mature products.