Acer searches for growth in China

Acer Inc (宏電) said it's betting on China's personal computer market for growth as the Taiwan-based PC maker faces slowing demand in the US, its biggest market.

Acer, which plans to sign up with 1,000 stores in China this year to sell its products, said it is expanding in China in a bid to turn profitable in its PC business.

"We relied on the US market for growth in the past," said Wang Cheng-tang (王振堂), chairman of Acer Sertek Inc, who oversees the sales of the company's branded products. "But now we must place our hope on China's massive market." Acer, once one of the world's seven largest PC makers, gave up its retail business in the US last year to focus on making PCs for companies such as International Business Machines Corp.

Acer sells under its own brand in Europe and Asia.

The company expects to lose money in its PC business in the first half as sales of its branded PCs fell and customers such as IBM placed fewer orders, Wang said earlier. Shares in Acer have fallen 59 percent in the past 12 months, compared with a 44 percent decline in Taiwan's key stock index.

Improving Ties Meanwhile, Legend Holdings Ltd (聯想集團), China's largest PC maker, said it sees ties with Taiwan's computer makers improving.

"Taiwan computer makers are key suppliers in our annual purchases," Legend Chief Executive Officer Yang Yuanqing (楊元慶) said.

Yang is in Taiwan to attend Computex, a computer show, and "fortify the bond [with Taiwan companies], not just place orders." As part of the show, Yang participated in a forum, sponsored by Computex, with Acer's Wang.

"The massive US computer market has supported the growth of US computer makers," Yang said. "China's massive market will certainly be able to maintain the growth of many Chinese computer makers like Legend and Acer Inc." Shares in Legend Holdings rose 3.7 percent to HK$5.60. The stock has risen 22 percent this year, compared with a 12 percent decline in the benchmark Hang Seng Index.

Acer shares rose 5.2 percent to NT$20.2 yesterday.