Mainland China and Taiwan account for a fifth of total global shipments of radio sets. According to a World Trade Organization agency, the region has maintained its worldwide lead in radio exports since 1999.
Radios are large-volume exports of mainland China. The area's production in 2004 was 310 million radios, worth approximately US$340 million.
Radio output from mainland China and Taiwan makers registered a 16 percent increase from 2003's level of 266 million units. Most makers are also shifting the focus of their product lines to include lucrative and high-end products such as those in the A/V line.
Radio manufacture has a long history in mainland China, dating back to the 1930s. In mainland China, radio makers are classified into: radio specialists; audio products makers that manufacture radios alongside a varied product line that includes mini-component systems and portable CD or cassette players; and electronic toys and premiums makers that mainly focus on novelty and clock radios.
Taiwan's, on the other hand, is relatively more recent, with companies focused on the production of newer and higher-technology radios, digital audio broadcast units, in particular. In Taiwan, companies that make analog units have transferred production to mainland China. Those that maintain production on the island focus on DAB radios.
This report covers 41 radio manufacturers in mainland China and Taiwan. Global Sources market analysts visited the factories of 21 of these companies.
Geographic Distribution
• The key manufacturing center is southern China, primarily Guangdong province, which hosts some 80 percent of active makers.
• Pockets of radio makers are also scattered in the coastal provinces in the eastern part of mainland China, including Fujian, Zhejiang and Shanghai.
Production Capability
• The production output of makers was approximately 37 million units in monthly capacity for 2004. Broken down into the five radio types, production volume was made up of: 20.3 million pocket/pendant radios, 10.3 million portable radios, 2.8 million tabletop radios, 3.9 million novelty radios and 318,000 DAB radios.
• Makers are girding up for capacity expansion with new factories, equipment purchases and additional workers.
Product Development and Prices
• The typical features of mainstream radio models are: manual or digital tuning, auto-scan, calendar and clock/alarm functions and AM/FM modulation. Radio Data System (RDS) decoding is found on midrange models. DAB technology seems to be a growing trend, as the radios line migrates to digital.
• Product development is moving in two directions. One is toward multifunctionality and cosmetic enhancements. The other is toward the high-end, with more makers earmarking R&D funds for the development of phase-locked loop (PLL) and DAB-capable units.
• Prices vary according to features. Basic, analog radios range from US$0.50 to under US$5. Those with higher-end features such as multiband shortwave, PLL technology and DAB capability can be priced higher than US$50.
Industry Overview
The global trade in radios was estimated to be worth over US$16 billion in 2003, according to statistics from the International Trade Centre (ITC), a technical agency jointly supported by the UNCTAD and the World Trade Organization. Among more than 80 countries that have been reporting their radio exports since 1999 to ITC, mainland China has maintained the lead. The country has accounted for some 20 percent of the worldwide shipment for the last three years.
In 2003, mainland China's radio exports were valued at over US$3.26 billion. Malaysia and Mexico followed with US$1.5 billion and US$1.47 billion, respectively.
Radio sets are among mainland China's large-volume exports. According to statistics culled from China Customs, more than 200 million radio sets were exported in the first three quarters of 2003. The estimated export volume for 2004 is 310 million units, valued at US$340 million.
Manufacturing Centers
The province of Guangdong is the key production center, hosting 80 percent of some 200 active makers. Industry sources, however, say that pockets of radio makers are also scattered in coastal provinces in the eastern part of mainland China, including Fujian, Zhejiang and Shanghai.
Nearly all of the 41 manufacturers interviewed for this report, including the Taiwan-based makers, manufacture their radio products in the mainland China province of Guangdong. The city of Shenzhen, in particular, is the primary production hub.
Dongguan, Guangdong and Zhengzhou, Henan province are likewise factory sites for two makers. Sanli Electronics manufactures out of Dongguan while Zhengzhou Xingyuan Electronic has two production facilities — one in Zhengzhou and another in Shenzhen. Taiwan-based radio maker Deep Sound Tech has a factory in Dongguan, Guangdong.
Industry Players
In mainland China, radio production dates back to the 1930s when most makers were state-owned enterprises. In the 1990s, private companies began to dominate the line. At present, there are 150 radio manufacturing companies in the mainland, 90 percent of which are privately owned. The number of industry players has shrunk from the 200 companies in 2003. Industry sources say those that have left the line changed their product focus due to decreasing profit margins.
Makers in mainland China are generally classified into three types: specialized makers who focus on R&D; audio products makers who have a varied product line; and electronic toys and gifts makers who mainly focus on novelty and clock radios.
Among the companies surveyed for this report, over a third have at least 10 years worth of radio manufacturing experience. East Power Industrial Co. Ltd (Dongsong), established in 1984, has been producing radios the longest.
In Taiwan, local production of radios has declined since most traditional analog radio makers have moved their production to mainland China. The island's Industrial Technology Intelligence Services (IT IS) estimates that production value in 2003 was worth US$5.5 million, down from 2002's US$7.6 million.
Supplier Profile
Deep Sound Tech Co. Ltd
Deep Sound Tech Co. Ltd (DST) is a Taiwan-based company with a production facility in Guangdong, mainland China.
Established in 2003, the company started developing, manufacturing and marketing radios the following year. It is producing an average of 5,000 units per month of digital audio broadcast (DAB) radios and currently exports all its production output.
In 2004, the export value of its DAB radios amounted to US$1.5 million. Export value of all its products increased by 25 percent, from US$4 million in 2003 to US$5 million in 2004.
Based on this, the company is targeting exports in 2005 to reach US$6 million, anticipating a 100-percent hike in production and 80-percent increase in exports. Eighty percent of output goes to countries in Western Europe and 10 percent to North America, while 10 percent is spread over mainland China, Japan and the domestic market. DST mainly caters to non-OEM buyers, which account for 80 percent of sales. Twenty percent comes from the company's sales under its own brand. The company plans to set up two new foreign offices in Hong Kong SAR and Germany.
Manufacturing Capability
DST's head office is located in Taoyuan, Taiwan but its factory is in Dongguan, Guangdong province in mainland China.
The factory has a total area of 6,000sqm and three production lines. It has 200 workers, including 190 production workers, five QC checkers and six R&D personnel.
Its monthly capacity is 30,000 units in-house or 60,000 units, including subcontracted production.
The factory is equipped with an estimated US$1 million worth of machines and equipment. In 2004, the company invested US$100,000 to acquire new production equipment. It has further plans to install three production lines in 2006 and acquire more production equipment and testing machines amounting to a total of US$300,000.
The new production lines may need an additional 6,000sqm of factory space. The new equipment will be sourced from South Korea and Japan.
Most production processes such as cosmetic designing, mold-making, plastic-injection molding and SMT are outsourced to other factories, but PCB sub-assembly and final assembly are conducted in-house.
The company assigns 20 people in the PCB sub-assembly process, while 20 workers attend to the final assembly.
QC and R&D
The company obtained its ISO 9001 certification in 2003 and expects to get its ISO 14000 endorsement by the end of 2005. Production adopts the MIL-STD- 105D sampling system. Radio products carry CE and LVD approvals. The in-house QC team consists of five personnel, while the R&D team has six staff members.
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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