IT industry spends $66bn in Taiwan

Taiwanese firms will produce 60 million notebook PCs this year

Consumer electronics giant HP will pay Taiwanese manufacturers over $22.5bn to build its products this year, according to forecasts released yesterday.

The figure represents an increase of more than 10 per cent in HP's outsourcing to Taiwan.

Similar increases are expected for other notable electronics vendors, including Apple, Sony, Dell and Toshiba, predicts Chicago-based THT Research, based on data collated from various sources.

Many well-known products, like Apple's iPod and Microsoft's Xbox 360, are actually manufactured largely by Taiwanese firms, along with more than 80 per cent of all the notebook computers sold worldwide, according to Taiwan's Market Intelligence Center (MIC).

Foreign companies spent a total of $66bn on outsourcing to Taiwan in 2005, 20 per cent more than expected, according to THT Research.

Although these products are made by Taiwanese companies, many of them can no longer be labelled 'Made in Taiwan', as Taiwan also outsources its manufacturing.

Over 70 per cent of the island's IT output is actually manufactured in neighbouring China, at the factories of Taiwanese companies' subsidiaries or partners.

Manufacturing facilities remaining in Taiwan focus on more complex, higher value components such as chips and LCD screens, and more advanced products such as high-end notebook PCs.