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Falling yen unlikely to impact Taiwan's PC industry

2013/04/20 17:41:32

Taipei, April 20 (CNA) A falling Japanese yen is unlikely to impose adversary impact on Taiwan's personal computer brands and contract PC makers as Japan is not a major rival to Taiwan in PC supply, market sources said Saturday.

In addition, as Taiwanese PC vendors and manufacturers tend to price their products in U.S. dollar terms in the global market, the yen's weakness will not affect their export value, they said.

Since the beginning of this year, the yen has fallen 14.72 percent against the U.S. dollar. The magnitude of the depreciation during the period of April 4-19, in particular, hit almost 7 percent on the back of more fund injections from the Bank of Japan (BOJ) to boost the economy.

On April 4, the BOJ announced that it intended to increase its bond purchases to 7.5 trillion yen (US$75.35 billion) a month, far beyond the 5.2 trillion yen expected by the market, and double the country's monetary base, which has depressed its currency.

After the BOJ announcement, the yen even plunged to a four-year low of 99.88 yen against the greenback at one point on April 11.

However, the Taiwan dollar has just fallen about 2.4 percent since the beginning of this year and appeared more stable than its Japanese counterpart.

Acer Inc., the world's fourth largest PC vendor, agreed with the argument of little impact from the yen's weakness, saying as Japan is not the major competitor to Taiwan in the world's PC market, a weakening yen is unlikely to affect Taiwan's global standing in the business.

For its part, Asustek Computer Inc., the world's fifth largest PC vendor, said that since Japan is not one of the company's major markets, the yen's volatility is not expected to influence the company's operations.

HSBC Securities analyst Lai Hui-chuan said as Japan is not a major supplier of components to Taiwan's PC manufacturers, a falling yen is unlikely to affect Taiwanese PC makers' operating costs.

Some of local light-emitting diode (LED) firms' global competitiveness, however, has been eroded as they have encountered competition directly from their Japanese rivals which are taking advantage of a falling currency, LEDinside analyst Chu Yu-chao said.

Chu added that Lite-One Technology Corp. and Unity Opto Technology Co. could feel the pinch.

Chu said other local LED firms which provide contract manufacturing services to Japanese clients may face requests from their buyers to cut ODM service fees to relieve the pain from rising costs resulting from the yen's plunge.

Echoing Chu, Chiang Wen-hsin, head of the solid-state lighting business of Taiwan's Delta Electronics Inc., said some of the company's Japanese clients have asked it to cut contract production fees.

But, Chiang said the silver lining of a falling yen is that Japan-made LED components have become cheaper than ever, which is expected to cut Taiwanese buyers' operating costs and enhance their competitiveness in the global market.

(By Lo Hsiu-wen, Han Ting-ting and Frances Huang)