Wavecom plans to move production of its mobile phone modules to the mainland, hoping to take advantage of increased demand amid government efforts to encourage Chinese manufacturers to source more of their parts domestically. The Nasdaq-listed company has three contract manufacturers in Europe and China but wants to shift its entire manufacturing base to the mainland, Wavecom Asia Pacific managing director Didier Dutronc said. The relocation is expected to be completed in the first half of next year and would help it save about 10 million euros (HK$90.87 million) a year in production costs. In the first half, the firm's operating expenses came to 69.6 million euros while it posted a net loss of 10.6 million euros. The shift would create about 500 to 800 jobs for Chinese manufacturers. Mr Dutronc said Wavecom, whose modules include substantially all of the hardware, software and technology needed to run a mobile phone, would benefit from recent Ministry of Information Industry regulations designed to promote domestic handset production. The central government wants mainland manufacturers to develop their own product designs and has restricted them from importing semi-knocked-down and complete-knocked-down handset kits. The kits, which mostly come from South Korean and Taiwanese manufacturers, allow many mainland handset makers to simply add their own brand-name labels without investing too much in product research and development. Mr Dutronc expected increased demand from mainland manufacturers for its modules as they look to shorten product development cycles to six months. He said it would take handset makers between 12 to 18 months to produce a new phone were they to develop each component from scratch. Wavecom said it was shifting its entire production base to China to be closer to mobile-phone manufacturers and improve efficiency. Low labour costs were also a draw.
