Given that brand operations are hard to expand and that large international players are continuously releasing orders, LAN equipment suppliers D-Link, Edimax Technology and C-Net Technology are concentrating less on the own-brand business and more on OEM operations.
Since LAN products are aimed at the retail market, some of Taiwan’s manufacturers have developed their own-brand products, contributing 34-35% of overall production value. The recent economic stagnation, however, has made the brand business hard to expand, and manufacturers have had to increase their OEM operations to boost revenues.
Those OEM orders are mainly coming from China, the US and Japan.
D-Link’s same-name brand and OEM operations used to account for a respective 70% and 30% of its overall operations,. However, given continuous flows of orders from the US and Japan, the proportion of its own-brand operations dropped to 62% in the first half of the year and OEM operations rose to 38%. Concentrating on the high-end OEM business, D-Link is manufacturing high-end Layer 3 switches for Fujitsu and Extreme Networks and producing VoIP products for Clarent. However, it is delivering own-brand products to China’s Legend Holdings. The company noted that its own-brand and OEM proportions in the second half of the year will maintain the same level as the first half.
Edimax used to divide production capacity equally between the Edimax brand and OEM operations. After receiving ODM and OEM orders from the US and China, its revenue structure has changed, with OEM operations contributing 60% of overall revenues and own-brand declining to 40%. C-Net’s revenues from same-name brand operations have also declined from 60% to 50% of overall revenues.
In contrast, Accton Technology, positioned as a professional OEM service provider, has always kept its own-brand operations at less than 30% of overall operations. It is developing its SMC brand in the US and Europe and promoting the SMC and Accton brands simultaneously in the China market. However, since its long-term partner 3Com is continuously releasing orders, its brand and OEM proportions will remain the same.
Article translated by Liu Yi-fang and edited by Richard So
