Wu Kunhong, VP of procurement at Chinese telecom equipment and terminal manufacturer Huawei, estimated in a recent visit to Taiwan that Huawei will make NTD 110 bln (RMB 24.6 bln) in purchases from Taiwanese suppliers in 2011, up 10-15% YoY. Electronics manufacturer Foxconn (2038.HK; 2354.TW) will remain Huawei's largest Taiwanese supplier. Huawei today signed a three-year NTD 70 bln procurement agreement with Foxconn and Taiwanese digital satellite communication and wireless consumer electronics manufacturer Prime Electronics and Satellitics. Foxconn will provide electronic components, terminal assembly, and contract manufacturing services, while Prime Electronics and Satellitics will provide set-top boxes and WiMAX terminals.
Huawei's other Taiwanese OEM partners include Foxlink Group, Askey Computer Corporation, Alpha Networks, and Accton. PCB suppliers include Unimicron and Compeq, while IC suppliers include Ralink and Richtek. Other suppliers include Chimei Innolux, Wintek, and Delta Electronics.
Huawei currently sources its key chipsets from North American and European suppliers mainly due to patent rights, terminal equipment and electronic components from Korean and Taiwanese providers, and low-end and mature products from mainland firms, according to Wu, with Taiwan suppliers accounting for more than 30% of total procurement spend.
Wu added that Huawei outsources 70% of production, a proportion that may increase in the future. Huawei plans to expand its partnership with Foxconn from handsets and data cards to include tablets.
Keywords: Wu Kunhong overseas tablet hardware Prime Electronics and Satellitics Askey Unimicron Compeq Ralink Richtek computer consumer electronics procurement telecom wireless Alpha Networks Foxconn Huawei telecom equipment WiMAX 2038.HK 2354.TW Chimei Innolux Foxlink IC OEM PCB Taiwan Accton Wintek Delta Electronics contract manufacturer handset data card set-top box