Dell to Scale Up Procurement in Taiwan in 2002
October 26, 2001 (TAIPEI) -- Dell Computer Corp. revealed it would increase procurement in Taiwan by 15 percent to 20 percent in 2002.
A high-ranking executive in Dell's Asia Pacific procurement division said Dell is confident of its performance in 2002, and although the global economy remained sluggish, a shake-up was possible in the wake of the merger plans of Hewlett-Packard Co. and Compaq Computer Corp., and the continued U.S.-led military action in Afghanistan.
In order to lower manufacturing costs in line with falling prices in the PC industry, Dell will increase its contract manufacturing orders. Dell has purchased US$5.5 billion so far this year in Taiwan. With the expected procurement increases, Dell's purchases may reach US$6.3 billion to US$6.6 billion next year in Taiwan.
The executive said that Dell's business would profit from reconstruction and replacement following the Sept. 11 attacks. Besides, with the military action in Afghanistan continuing, more and more U.S. companies are encouraging their staff to work at home, a policy change which should stir up demand for Dell's notebook computers.
The news that Dell will increasingly place orders for Taiwan-made PCs will bolster Dell-related companies in Taiwan, such as Quanta Computer Inc., Compal Electronics Inc. and Wistron Corp., and has raised their hopes that their performance in 2002 will take off on the back of new orders from Dell, particularly for notebook computers.
As Dell's most important contract manufacturer, Quanta won 70 percent of Dell's notebook computer orders this year in Taiwan, while Compal won the remaining 30 percent. Wistron also has begun to deliver small-scale orders to Dell this year.
Dell also has sourced production of desktop computers and motherboards from Hon Hai Precision Industry Co., Ltd. and Asustek Computer Inc., peripherals from Hon Hai and Acer Communications & Multimedia Inc. and power suppliers from Delta Electronics Corp. and Lite-On Electronics Inc.
Shrugging off the stagnation in the PC market, Dell has regained the initiative on the strength of its special build-to-order marketing strategy and low-price tactics. According to IDC's research, Dell's PC sales grew by 6 percent in the third quarter in the United States, and won market share of 26.4 percent, a new record high and double the share of Compaq, the runner-up. In Asia, Dell enjoyed a sharp growth of 38 percent in PC sales in the third quarter, while IBM's PC sales dropped 20 percent, and Compaq saw a slide of 8 percent in the region.
(Commercial Times, Taiwan) |
