Abstract

From the supply chains of Taiwan WLAN manufacturers it can be seen that for WLAN contract manufacturing and chip selection, the process goes through three main company types, including chip suppliers, Taiwanese ODMs, and branded vendors. In the router business this is particularly apparent. In recent years, Netgear has gradually diversified its contract manufacturers and chip suppliers, and this is particularly true of 802.11 Draft n products. For Linksys and D-Link, relationships with chip suppliers and outsourcing partners are more stable. For the network interface cards used in notebook PCs, after branded vendors choose chip suppliers, they then select Taiwanese outsourcing partners. For this reason, the effect of switching orders for these products is more evident. Orders are often switched because of cost, production capacity and the size of a contract manufacturer.

Currently, Taiwanese WLAN manufacturers enjoy advantages in terms of technology, scale and low costs. These companies already account for more than 80% of global shipments. However, as the share of consumer electronics products equipped with Wi-Fi increases, and as many companies in this segment are Japanese, it is possible that Taiwan's share of global shipment may slip. Still, Taiwanese ODM manufacturers can use low cost and economies of scale to win orders from consumer electronics vendors. In addition, as mature and small-sized products gradually start adopting chip-on-board solutions, Taiwan's Wi-Fi module manufacturers are expected to be somewhat affected. For this reason, a number of companies that do not produce Wi-Fi modules for notebook PCs, have already started to aggressively seek new customers, in order to make products such as Wi-Fi SOHO routers, Wi-Fi DSL customer premises equipment and other terminal products, to minimize the impact from the chip-on-board trend.