WLAN Products

Taiwan supplies over 90% of the world's WLAN products, while makers in mainland China are planning major capacity expansions as they aggressively enter the export market.
Now you can profit from China's emerging high-quality, low-cost producers by using this 108-page China Sourcing Report.

It brings you profiles of 51 tier-one manufacturers from mainland China and Taiwan, that you can use to pre-qualify new producers or benchmark your current suppliers.

Plus you'll get a comprehensive overview of mainland China's and Taiwan's WLAN product supply industries, with information on current issues and upcoming trends.

What you'll get

In-depth profiles of 25 leading suppliers, so you can contrast the production capabilities, export strategies, QC procedures and expansion plans of these market leaders

Concise profiles and a supplier comparison table for 26 additional suppliers, highlighting information such as factory locations and sizes, product lines, export capacities, technology partners, and product certifications and approvals

An easy-to-use product comparison table, with specifications and color pictures, to help you compare 144 export access points, USB Bluetooth dongles, and WLAN cards, switches, routers and hubs

Background information to pre-qualify manufacturers that supply to big buyers such as Acer, CompUSA, Dell, HP, IBM, Microsoft, Samsung and Toshiba

How you'll benefit

Discover which China manufacturers are increasing production and providing an export-market alternative to Taiwan producers

Pinpoint the suppliers that are integrating 802.11g capability into their offerings

Understand how the increased availability of Taiwan-made WLAN chipsets is impacting the supply and FOB prices of end products

Get quick-to-use summary listings covering all featured suppliers, with easily comparable statistics plus verified contact details and website addresses

Executive summary

The wireless local area networking (WLAN) product industries in mainland China and Taiwan are in transition. 802.11b, the de facto Wi-Fi standard for the past few years, is being supplanted by 802.11g, a backward-compatible protocol that is faster, has a wider range, and offers better security features.
The shift is nearing completion in Taiwan, where as early as Q1 2004, about 50 suppliers were already producing more 802.11g products than 802.11b. The turnover is underway in mainland China, where makers have shifted product development from 802.11b to 802.11g. In 2005, eight out of every 10 WLAN products from the mainland will support 802.11g.

The above facts are among the major findings of this report, which is based on a survey of 51 WLAN product suppliers from mainland China and Taiwan. Global Sources also visited the factories of 25 suppliers to come up with in-depth profiles of their manufacturing and exporting activities.

Another major discovery is the degree to which Taiwan WLAN product manufacturers dwarf their mainland China counterparts in terms of production capacity and monthly output. Twelve of the 16 mainland China WLAN makers with in-depth profiles have less than 100,000-unit monthly production capacity. Out of the 12 companies, five makers have 4,000-unit or less monthly capacity.

In contrast, almost all Taiwan makers have a monthly production capacity of more than 100,000 units. Three suppliers are capable of accepting 1 million-unit orders.

Taiwan is projected to account for 90 percent of the global WLAN market in 2004. For big-volume purchasers looking to place orders now, Taiwan is the logical sourcing option. In H1 2004, the Taiwan suppliers with in-depth profiles had an average 51 percent unused capacity. This implies that makers can deliver even if demand doubles by 2005. Out of the surveyed Taiwan suppliers' total monthly production capacity of 10.2 million units, the total monthly output in H1 2004 was only 4.1 million units.

Taiwan's WLAN makers are export-oriented. Buyers can also trust the quality of WLAN products from Taiwan makers, as these are the same suppliers of a wide range of WLAN products including cards, access points and routers to retail chain stores such as BestBuy, CompUSA, Office Depot and Ingram Micro.

Mainland China suppliers, on the other hand, are mostly domestic-oriented companies who have been in the WLAN line for less than three years. In 2004, only 33 percent of mainland makers' WLAN revenues are expected to come from exports. Most makers produce WLAN cards only.

However, suppliers from the mainland cannot be ignored despite their current small production and meager export activity. At least eight of the surveyed mainland China makers revealed production expansion plans, some of which extend until 2007. Their roadmaps revealed construction of new factories, installation of additional production lines, acquisition of new heavy equipment and hiring of more workers. Many mainland suppliers also announced plans to be more active in the export business.

Industry overview

The global wireless local area networking (WLAN) manufacturing industry is dominated by Taiwan. In 2004, more than 90 percent of WLAN products that will be shipped around the world will come from Taiwan, whose leading suppliers can produce up to 4 million WLAN products per month — almost all for export.

The output of WLAN products from mainland China manufacturers is paltry compared to that of their Taiwan counterparts. In H1 2004, suppliers' average monthly output was less than 11,000 units per company.

Small as it already is, a very low percentage of output goes to overseas buyers. Suppliers, most of whom entered the line in the last two or three years, are heavily domestic-oriented.

However, a few newly established mainland China makers are beginning to focus on the export market. Some other makers that consider WLAN as a secondary business have unused production capacity that can be tapped to produce up to 1 million units per month. They, too, plan to explore new export markets.

Favorable market conditions are also convincing other makers in the mainland to explore overseas markets in 2005.

WAPI stalled mainland China's WLAN industry as Taiwan's surged
Uncertainty over the implementation of mainland China's self-developed Wired Authentication and Privacy Infrastructure (WAPI) WLAN standard forced many mainland makers' production to a standstill in H1 2004. Orders only started to trickle in when WAPI's implementation was suspended.

Despite this temporary setback, suppliers are brimming with confidence for 2005. The domestic market for WLAN products is projected to grow between 30 percent and 50 percent. Many makers are also targeting to launch export operations. Seven to 10 new makers are expected to enter the line in 2005.

Samples of supplier profile

AboCom Systems Inc.
AboCom, founded in 1995, manufactures mobile and SOHO data communication products including PCMCIA cards. The company released its first 33.6Kbps PC card supporting LAN and fax modem functions at Computex Taipei in 1996.

With a total of 700 employees, including 80 R&D engineers, 30 QC technicians and 400 production workers in two factories, AboCom has a monthly capacity of 300,000 to 400,000 WLAN products. AboCom designs and manufactures all its products in-house.

With demand for information and telecom products increasing, AboCom has broadened its product range to include more Intel-based products particularly in the IA, high-speed Internet access, WLAN and storage sectors. About 40 percent of its networking product output is taken up by wireless products.

AboCom was listed on the Taiwan Stock Exchange in December 2000. It had total revenues of US$116 million in 2003, with revenues from WLAN products accounting for US$11.6 million or 10 percent.

Its other products such as flash drives accounted for US$42.2 million, or 36 percent of total sales; Ethernet products, US$28.5 million, or 25 percent; and Bluetooth products, US$1.28 million, or 1 percent.

AboCom expects 2004 turnover to hit US$138.85 million, an increase of about 20 percent from 2003. Sales of WLAN products are projected to account for 40 percent to 50 percent of revenues in 2004.

AboCom also sells own-brand products in the domestic market, while all of its export revenues are derived from OEM and ODM projects. In 2003, 32.3 percent of revenues were derived from sales in Taiwan, while 34.7 percent came from Asia and 17.1 percent from North America. Other major export destinations include Europe, South Korea and Japan.

Its roster of ODM partners/clients includes Microsoft, which has recognized AboCom as a Gold-Level ODM Partner. In Q1 2003, the firm was awarded Microsoft ODM Partner of the Year and also became a Microsoft Windows Embedded Partner.

AboCom received ISO 9001 certification in 1998, ISO 14001 in 1999 and TL 9000 in 2002. The company is headquartered in Hsinchu Science-based Industrial Park and set up an R&D center there in 1997. It has two other branches, in Taipei and in the United States.

Since 1999, all manufacturing has taken place in Junan, Miaoli, which is around 30 minutes' drive south of Hsinchu. In 2001, AboCom added 23,920 square meters of production space to its Junan factory, incurring a capital expenditure of US$20 million.

Manufacturing facilities include nine SMT lines as well as automated lines for testing, assembly and packing processes.

Sample of product gallery

Access points Company:Accton Model:WA6102 Dimensions (mm):213x125x24 WLAN standard:802.11a, b, g

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Global Sources Industry-specific China Sourcing Reports

All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.

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