IT makers immune to impact of rising NT$

Taipei, Sept. 24, 2003 (CENS)--The N. T. dollar posted a sharp rise of NT$0.253 to close at NT$33.805 to US$1 on Sept. 22, causing the weighted price index of the local bourse to drop 82.16 that day. But Taiwan's makers of information technology (IT) products felt O.K. about the appreciation of the local currency, saying they would maintain strength in the industry.

Market observers indicated that the spiraling of the local currency is likely to affect some traditional industries rather than the IT industry that has largely been globalized. Many manufacturers of IT products are deemed immune to the impact of the rising currency since they have experienced numerous fluctuations of international currency exchanges in the global market over the past years.

K.Y. Lee, chairman of BenQ Corp., said hat recently both the Japanese yen and the Korean won saw higher appreciation than the local currency against the U.S. dollar. So, he remarked that the appreciation of these regional currencies implies a growing economy in Asia.

BenQ is an export-oriented high-tech firm, Lee noted, so the influence from the appreciation of the local currency will be quite limited as most of the firm's production lines have been moved overseas. He added, the current exchange rate of the N.T. dollar against the U.S. dollar has just rebounded to the level of a few years ago, and should be acceptable. Nevertheless, he pointed out, there is an obvious recovery of the IT industry, particularly for consumer goods, and trading of IT shares in the local bourse has turned bullish.

Bob M.S. Wong, chairman of CMC Magnetics Corp., also noted the appreciation of the local currency would have little influence on his company, because CMC turns out mainly high-end popular products including diskettes, personal digital assistant (PDA) devices, and MP3 players. He said even if the N.T. dollar appreciates against the U.S. dollar by 15%, the net profit of the company will drop only 1%.

Wu Chun-yi, financial officer of Chunghwa Picture Tubes, Ltd., believed the soaring currency may have a little influence over Chunghwa Picture as the company's loans from local creditors are based on N.T. dollar and its display panel quotations to overseas clients are based on the U.S. dollar.

AU Optronics Corp. has no comment on the current appreciation of the N.T. dollar, only saying the company will see no impact as it has already adopted risk-hedging measures.