xDSL

The world's principal supply centers for xDSL equipment — mainland China and Taiwan — produce more than two-thirds of global broadband CPE products.
That figure will rise as suppliers expand ODM and OEM production capacities in response to rapidly growing demand.

Now you can profit from this increased supply-market activity with profiles of 35 tier-one manufacturers from mainland China and Taiwan that you'll find in this report

Your copy will also provide a detailed industry overview, including new product developments, price forecasts and information on other issues that will impact your sourcing in the months ahead.

What you'll get

In-depth profiles of 19 top suppliers providing details on product offerings, manufacturing capabilities, export capacities and R&D plans. Based on factory visits and personal interviews, this information is available nowhere else.

Short profile tables of 16 additional manufacturers, highlighting key sourcing data such as production capacities, export markets, technology partners and product certifications

Key facts to help you shortlist manufacturers that supply the world's leading brands including Acer, Dell, Fujitsu, NEC, Panasonic, Siemens and Thomson Broadband

The results of Global Sources' latest supplier survey, summarizing product and other projections for the next 12 months

How you'll benefit

Get a Product Comparison Table featuring 99 popular export DSLAMS, modems, routers and switches, all with detailed specifications and full-color pictures

Understand how the increased availability of SoC solutions impacts FOB prices

Discover how manufacturers are responding to the move of many telecom carriers to bundle xDSL equipment with their services

Benefit from quick-to-use summary listings covering all featured suppliers, with easily comparable statistics, as well as verified contact details

Executive summary

Taiwan is the primary supplier of xDSL CPE — modems, routers, switches, gateways, repeaters and multiplexers. According to a November 2004 estimate from the Market Intelligence Center (MIC), of the 46.2 million units that will be shipped worldwide in 2004, Taiwan-owned companies will contribute 33.9 million units or 73 percent. The shipped units constitute about 94 percent of the group's production estimated at 36 million units.

Among the other findings of this report about Taiwan-owned companies are:

• Between 15 and 20 companies are active players in the industry, with five dominating production.

• They manufacture more than 70 percent of their output in mainland China, mostly modems and routers. The balance is produced in Taiwan, mostly high-value and small-volume order products.

• They plan to increase their production to 37 million units and contribution to worldwide shipment to 34.4 million units in 2005.

Mainland China-owned companies were expected to produce 25 million units of DSL CPE in 2004. Of these, 7.2 million were to be exported, about 15 percent of the estimated worldwide shipment. Other findings about mainland China-owned companies include:

• About 30 companies comprise the industry, 10 of which are partly foreign-invested or joint ventures.

• They plan to increase their production to 32.2 million units and exports to 10.2 million units in 2005.

• OEM orders account for 80 percent of their exports, with the United States, Europe and Asia as primary destinations.

About 70 percent of manufacturers based in mainland China are found in Guangdong province, with Shenzhen as the hub. The mainland China manufacturing bases of Taiwan-owned companies are found in the provinces of Fujian, Guangdong, Hunan, Jiangsu and Shanghai.

This report includes 35 companies — 11 headquartered in Taiwan and 24 headquartered in mainland China. The factories of five of the Taiwan companies and 14 of the 24 mainland China companies were visited by the Global Sources research team.

The significance of the companies included in this report are:

• Eight of the 11 Taiwan-owned companies contribute 19.2 million units or 53 percent of the Taiwan-owned company group's production, and about 18.42 million units or 54 percent of its exports in 2004.

• The 14 mainland China-owned companies whose factories were visited by Global Sources contribute more than 70 percent of the group's xDSL production, and 50 percent of its exports.

• Most of their exported products conform to ADSL, ADSL2, ADSL2+ and VDSL standards. They forecast average FOB prices to be stable or decline by up to 10 percent due to the stable supply of chipsets.

• Among the major clients they serve are: Acer, Asus, Dell, D-Link, Fujitsu, LEA (France), Linksys, Loop, Melco, NEC, Panasonic, Siemens, Thomson Broadband and UT.

Industry overview

Digital subscriber line (DSL) is currently the world's most widely adopted broadband technology. The September 2004 report from the DSL Forum indicated that during the first half of 2004, the global DSL subscriber base reached 78 million users. This represents a growth of more than 30 million subscribers over a 12-month period ending in June 2004.

DSL now accounts for more than 60 percent of the total broadband subscriber base worldwide. There are at present more than 123 million broadband users worldwide.

When broken down, the European Union leads other regions in DSL subscription, accounting for 31 percent of the world total in 2004. It is followed by the Asia-Pacific, which has a 29 percent market share.

Mainland China climbed from a fourth position last year to become the leading DSL broadband service provider country. There are now about 13 million subscribers on the mainland, an increase of nearly 7 million a year or 119.4 growth.

The worldwide shipment of DSL customer premise equipment (CPE) in 2004 is estimated at 46.2 million units, according to the Taiwan-based market research firm Market Intelligence Center (MIC). Taiwan's DSL CPE shipment comprises mainly modems, routers and switches, and is projected to reach 33.9 million units in 2004, representing 73 percent of the world market. In 2005, Taiwan's share of DSL CPE shipments is projected to rise to 34.4 million units, or 77 percent of the world total, according to the MIC.

Mainland China's exports of xDSL products are estimated at 7.2 million units in 2004, roughly 15 percent of the worldwide shipment for the same period.

Total output for 2004 is projected to reach 25 million units, according to industry estimates. Suppliers expect production to increase by 30 percent to hit 32.2 million units in 2005.

Combined shipments from Taiwan and mainland China for 2004 are estimated at 41.1 million units, 89 percent of the worldwide shipment for the same year.

Manufacturing centers
Taiwan's major industry players generally manufacture their mainstream, volume-driven xDSL products, such as ADSL modems and ADSL routers, in mainland China. Some of them still keep a portion of production in Taiwan for high-value products such as DSLAM or SHDSL hardware that buyers generally demand in small-volume orders.

The main production centers in Taiwan are Taipei and Hsinchu. Taiwan makers' factories on the mainland are located in Fujian, Guangdong, Hunan, Jiangsu and Shahai provinces.

Askey Computer Corp., for instance, has factories in Taipei and Suzhou on the mainland, where models for mass production are manufactured. Askey's mainland factory has 60 production lines. Its facility in Taiwan is reserved for products on trial-run, as well as those that are highly complicated and need high system integration technologies.

Alpha Networks Inc. has factories in Hsinchu (Taiwan) and in Dongguan (Guangdong province). Its Hsinchu factory covers 48,777sqm and is staffed by more than 700 workers. The factory rolls out some 5 million xDSL products on average each year.

TurboComm Tech Inc. has a 13,465sqm factory in Taoyuan, about 30km south of Taipei. With three SMT lines, the company has an in-house monthly capacity of 300,000 xDSL products.

In mainland China, the primary xDSL production center is Guangdong province, where 70 percent of manufacturers congregate. The city of Shenzhen, in particular, is the key sourcing center.

A number of factors have made Shenzhen the xDSL hub. Among them are the presence of a mature supply chain within or surrounding the city, with handy sources for all the necessary raw materials and labor. Shenzhen port's proximity to Hong Kong likewise facilitates shipment of products overseas.

Samples of supplier profile

Alpha Networks Inc.
Alpha Networks Inc. provides comprehensive OEM and ODM networking equipment and solutions. It offers engineering and manufacturing services for both ready-to-sell and customer-specified LAN, MAN, wireless and broadband networking products. Its other product lines include WLAN, VoIP, SOHO router, storage and digital home products.

The firm started as the OEM and ODM business unit of D-Link Corp., a networking equipment manufacturer since 1986. Following encouraging OEM and ODM deals, the company was established in 2003.

Alpha Networks expects sales from all products to hit US$433.8 million in 2004 with 25 percent to 30 percent generated by several xDSL products. These include ADSL routers, modems, IADs (ADSL+WLAN+VoIP), ADSL2+, ADSL2++, VDSL IAD and IP DSLAM.

About 50 percent to 55 percent of revenue come from shipments to the United States, Japan and mainland China. Products are absorbed by global networking communication companies such as Fujitsu, NEC, OKI and Panasonic. To expand its business in the mainland, Alpha Networks has also formed a strong strategic relationship with Darson Trading.

Manufacturing capability
With factories located in Hsinchu, Taiwan and Dongguan, Guangdong province, the company boasts a monthly capacity of up to 420,000 xDSL products. About 60 percent goes to xDSL routers, 32 percent to xDSL bridges, 4 percent to USB devices, and 4 percent to WLAN products. Most production processes are done in-house, with only less than 40 percent of SMT subcontracted. The 48,778sqm Hsinchu factory employs 726 employees.

Key production equipment include the E4433B vector signal generator, the DXTE 2011 MB4000 BGA repair equipment, seven multipurpose mounters, seven high-speed mounters, three glue dispensers, seven nitrogen stoves, seven screen mounters, the RTX-113 x-ray, the DT551 coordinate machine and the SMT-10138-1E visual inspector.

R&D equipment include the Hammer ANVL, six units of Vision ICE, the MIG0603FCC B232 communication thunder test simulator, seven line simulators, three DL4-400J/ DLS 400J simulators, the 89640A (E8408A) Vector, eight units of spectrum analyzers, two DL4-400IAE wireline simulators, the DLS-5204 generator (DLS-5200), 10 units of SMB-2000 chassis, 23 units of SMB- 6000B chassis, two C-90 copper electric wave shielded chambers, 10 oscilloscopes and two EMI chambers.

Meanwhile, QC procedures use the KD-9363-EM400F2K-30N electromagnetic high-frequency vibration testing system, an SMS500 router, two SMB-2000 chassis slots, the SMB-6000B, the 1020A OSC test equipment, the C-90 copper electric wave shielded chamber, the environmental stress screen (ESS) chamber, and the programmable temperature and humidity chamber.

QC and R&D
The majority of R&D processes are done in-house, including software development and case design.

The company has four R&D centers. These are in Hsinchu, Taiwan; Santa Ana, United States; Chengdu, Sichuan province, mainland China; and Bangalore, India. About 25 percent of employees are engaged in R&D.

Sample of product gallery

DSLAMs Company:Fiberhome Model name:AN2200-01 xDSL technologies & standards supported:ADSL2, ADSL2+, SHDSL, VDSL; G.992.1, G.992.2, G.993.1, G.994.1,G.995.1, G.996.1, G.997.1; 802.3, 802.3u, 802.3x, 802.3z, 802.1d, 802.1p, 802.1q, 802.1x; RFC0768, RFC783, RFC0791, RFC0792, RFC0793, RFC0793, RFC0854, RFC0894, RFC115 Upstream rates:ADSL: 1Mbps; ADSL2+: 2Mbps; SHDSL: 2.3Mbps; VDSL: 15Mbps

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Global Sources Industry-specific China Sourcing Reports

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