Rechi Ties Up With UMC to Tap Production of Inverter Compressor

Taipei, Dec. 15, 2005 (CENS)--Rechi Precision Co., one of the world's top-four producers of compressors, will cooperate with United Microelectronics Corp. (UMC), Taiwan's second-largest chipmaker, to roll out inverter compressors.

With today's increased emphasis on energy conservation and environmental protection, some industrialized nation, such as Japan, have increased the adoption of inverter-driven air conditioners because the inverter models reduce energy consumption by 20% when compared to traditional models.

With the adoption of UMC-designed IC (integrated circuit) modules that control electricity supply, Rechi's inverter compressors will hit the market sometime in the first quarter of next year. By 2008, Rechi will be able to roll out two million inverter compressors per year, which will help it create an additional NT$5 billion (US$148.8 million at US$1:NT$33.6) in revenue.

Recently, UMC procured an 8% equity stake in Rechi to become the latter's second-largest shareholder, behind only Sampo Group. The equity will give UMC a seat on Rechi's board of directors, and it will help Rechi increase its home-appliance component production.

At present, inverter-driven models account for more than 20% of Taiwan's air-conditioner market. Rechi said it would place an initial priority on delivering inverter compressors to Taiwan's Sampo Corp., Taiwan Kolin Co., and Tatung Co. for their home-appliance products. Rechi's inverter compressors are estimated to help domestic manufacturers of inverter-driven air conditioners save production costs by more than 20%.

Rechi has said that there is an ample room for growth in the inverter compressor market, as world demand for air conditioners currently reaches 65 million units a year.

Rechi currently is capable of rolling out 7.15 million compressors per year, including scroll, refrigerant rotary, reciprocating, and screw types. Annual output is likely to reach eight million units next year. The company estimated its annual sales would reach NT$7 billion (US$208.33 million) this year.