FIC deal signals shift in Taiwan-Sino trade
TAIPEI Ð Taiwan's First International Computer Group (FIC) said yesterday it had secured a big order from Legend Holdings to make notebook computers for the Chinese computer giant on a contract manufacturing basis.
The order is a sign of an increasing number of Taiwanese companies selling into China, previously seen as a low-cost production base for Taiwan companies, said analysts.
"We will supply about 70 percent, or 170,000 units, of Legend's total demand for notebook computers this year," said a FIC official, more than double the 80,000 supplied to Legend last year.
"Both sides will benefit from the deal," said Paul Wang, a technology analyst at SG Securities.
"In addition to Legend, some other Chinese computer makers have placed orders with Taiwan's OEM makers."
Taiwan companies, which often rely on big US customers, can also spread their risk by strengthening cooperation with Chinese companies, said Wang.
It was not known where Legend would secure the remaining 80,000 notebook computers it needs this year, as the company does not yet have the technology to make notebook computers itself.
The computers will be made in Taiwan and then shipped to China, said the FIC official.
Responding to the news, FIC shares surged NT$1.10 or the daily 7 percent limit to NT$17.00 at 0320 GMT, outperforming a 0.06 percent rise on the main TAIEX market.
"Our partnership with Legend is more than three years old and the cooperation is expanding," the official said.
He said the 80,000 notebook computers FIC made for Legend last year accounted for around 73 percent of Legend's 110,000 units sold.
"China's economy is relatively stronger than others and the China market has vast potential," he said.
"But China, which lacks the experience to design and make notebook computers, still relies on Taiwan."
Many of Taiwan's technology companies have manufacturing plants in China Ð which offers unmatched labour and cost benefits Ð mostly for shipment to other markets. bday.net |
