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Monday, July 02, 2007
Asustek to Split Into Three Next Year

Asustek Computer Inc. will spin off its contract-manufacturing unit by the end of this year as part of its plan to boost revenue, according to the company`s top executive.

Asustek Chairman Jonney Shih pointed out that after the separation the contract-manufacturing operation will dedicate itself to the goal of becoming the world`s No.1 electronics-manufacturing service provider, according to China Economic News Service (CENS).

The company`s customers, particularly those operating brand names, have criticized its double identification and threatened to reduce orders to it. The situation has been complicated by its reduced shipments of Sony PS3 game consoles, raising the possibility that its revenue for the second quarter will drop 40% from the first quarter to NT$140 billion.

Shih analyzed that contract manufacturing operation is different from brand-name operation, stressing production scale and capacity, capital, vertical integration as well as management. He added that after the separation the company`s contract-manufacturing operation will be free from the burden of confronting its brand-name operation.

Asustek's name brand business will continue to operate under the same name, while its PC-related manufacturing operations will become Unihan Technology Corp. Asustek's casing, modules and non-PC contract manufacturing business will become Pegatron Technology Corp.

The split will take place on January 1, 2008.

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