TAIPEI, Apr 16 (AP) -- Taiwan's Silitech Technology Corp. says it aims to overtake its Japanese rivals and become the world's largest maker of keypads for mobile phone handsets by 2007.

Silitech commanded a 15 percent market share last year, ranking it as the world's No. 4 maker of keypads, behind Japan's Shinetsu Chemical Co. Ltd, Sunarrow Ltd. and Polymatech Co, the company said. Its major clients include mobile phone heavyweights Motorola Inc., Siemens AG and Nokia Corp.

"Our goal is to become the industry's No. 1 player in three years, when we are expected to account for more than a 20 percent share of the market," James Huang, associate vice president of Silitech, said in a recent interview.

Huang said his company's partnership with Nokia would play a key role in its growth. Most multinational mobile handset companies, including Nokia, have been struggling in recent years with cut-throat competition, prompting them to seek ways to cut costs.

"Nokia has built a solid relationship with its Japanese partners since the company started its handset business," Huang said. But faced with cost pressures, mobile handset makers are being forced to outsource more orders to suppliers that can offer cheaper prices with comparable quality, he said.

"On top of Nokia, rising orders from South Korean companies, such as Samsung Electronics and LG Electronics, will also help increase Silitech's global presence," he added.

In 2005, the company expects Motorola to account for 30 percent of Silitech's sales in the keypad business, while Siemens will likely represent around 18 percent and 20 percent and Nokia 10 percent. Growing orders from Silitech's major clients will help boost its keypad shipments by around 20 percent to 119.5 million units in 2005 from about 99.6 million last year, the company projects.

Brokerage Morgan Stanley forecasts Silitech will make a net profit of 917.4 million New Taiwan dollars (US$29 million, €22.4 million ) on consolidated revenue of NT$5.66 billion (US$177 million, €137 million) this year. In 2004, net profit was NT$783.8 million (US$24.8 million, €19.21 million).

To sustain Silitech's production growth, Huang said, the company will increasingly rely on its China operations. In 2005, Silitech expects to get 80 percent of its total keypad shipments from an expanding plant in the southern city of Shenzhen, up from 70 percent last year.

Adding to the company's production capacity will be the ramp-up of a new plant located in the eastern city of Suzhou.

"Our Suzhou plant is under construction and is expected to start mass production in the second quarter of next year, when we will command production capacity of 120 million units per year from Taiwan and China," Huang said.

Unlike Japanese rivals, which do assembly in China but keep some higher-end other processes such as design in Japan, Silitech is building complete supply chains in China, which will improve efficiency, Huang said.

S.Y. Wu, president of Silitech, said the company planned to form a joint venture with another Taiwanese firm to strengthen its competitiveness.

"Integration is an irresistible trend. We will seek to fortify ourselves, either through mergers and acquisitions or through forming a joint venture," said Wu. "At the current stage, we're more likely to team up with a Taiwanese company to complement both sides' product lines."