Twinhead International Corp (倫飛電腦), which makes notebook computers for Sharp Corp, said it will fire a fifth of its workforce to cut costs and boost competitiveness.
Twinhead will fire 200 workers at its factory in southern Taiwan, less than five months after it sacked 117 employees at the same plant, the company said in a statement.
With the latest dismissals, Twinhead has cut staff by more than a quarter so far this year.
Computer-related companies in Taiwan are slashing profit targets and reducing costs by shedding workers as demand for PCs and the components used to make them fails to recover.
Taiwan's economy is already struggling with record unemployment and the slowest first-quarter growth in more than two decades.
Twinhead's layoffs will further damp any prospect of a recovery in consumers' appetite to spend. Taiwan's consumer prices fell in June for a third month.
On Tuesday, LG Philips Displays, a venture with South Korea's LG Group and Royal Philips Electronics NV of the Netherlands, said it would close two factories and fire 1,200 workers in Taiwan as falling demand for computers crimped sales of PC monitors.
Last week, Twinhead lowered its 2001 sales forecast by 67 percent to NT$6 billion (US$174 million) and said it expected to post a pretax NT$685 million loss this year. The company posted losses for the previous two years.
Twinhead shares rose NT$0.35, or 6.9 percent, to NT$5.45.
The shares have risen 32 percent this year, compared with a 0.7 percent fall in the TAIEX.
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