Taitien Electronics, which mainly makes crystal oscillators used for base station equipment, has said it is considering outsourcing instead of adding new capacity in 2011.

Competitive pricing and low gross margins have been causing many quartz component makers to abandon plans for capacity expansion.

The production cost of quartz components has been increasing due to fluctuations in the Japanese Yen and increasing labor costs in China. To secure market share, many firms have competed by lowering prices.

According to industry sources, shipments of crystal oscillators have been rising due to increasing demand for femtocells. Many international network equipment firms, such as Siemens, have been eagerly certifying Taitien's products due to concerns of a shortage of supplies from Japan-based firms after the earthquake on March 11.