23 Sep 2009

China move will help boost sales, output - Rakon

7:59 am on 23 September 2009

Technology company Rakon says its plans to move some manufacturing to China will provide greater exposure to the fast-growing smartphone market.

The company has announced a $65 million capital raising plan, to partially fund the construction of the manufacturing plant in China.

Rakon specialises in making quartz crystal oscillators which are components used in GPS, and the company says the factory in China will allow it to double its output to 10 million oscillators a month.

Managing director, Brent Robinson, says strong growth in smartphones, which have inbuilt GPS, is expected to boost Rakon's sales by 150% in the second half of the 2010 financial year.

He says all the US smartphone manufacturers have designed Rakon into their new platforms and the company expects significant sales.

Mr Robinson says local authorities in China are providing financial incentives to build the planned new factory there, and the shift will put Rakon closer to smartphone manufacturers like Alcatel, Ericsson, Nokia and NEC.

Mr Robinson says the plant will create crystals, which will then be shipped back and assembled into oscillators in New Zealand.

He says oscillator manufacturing may eventually move to China, but New Zealand jobs will not be affected as the company will focus on developing other products here.