Inventec to reduce local production

One of Taiwan's top notebook manufacturers plans to retire 500 workers early in a move that may signal that jobs are being lost to the shift of production to China.

Inventec Electronics (英業達) is encouraging 500 employees to take early retirement before year end as the company shifts more of its production to its plant in Shanghai.

"Production will shrink to 30 percent to 40 percent in Taiwan and 60 percent to 70 percent of production will move to Shanghai. [We will encourage retirements] in production-related departments across the board in all age groups," Inventec spokesman Alex Hsu (徐信群) said yesterday.

Sagging orders from Hewlett-Packard (HP) were also cited as a possible reason for the job cuts, an anonymous analyst at a securities firm suggested. HP is one of Inventech's largest notebook customers.

Researchers agree the shift of production out of Taiwan will result in more job redundancies.

"More than 50 percent of Taiwan's notebook PCs will be made in China next year, making China the No. 1 production base and Taiwan No. 2. There will be lots of layoffs in Taiwan as the companies will hire local Chinese to work on production lines across the Strait," Chou Shih-hsiung (周士雄), an analyst at the government-funded Market Intelligence Center said.

Forty percent of Taiwan's notebook production is now in China.

"The emphasis will soon shift to our China factory. I don't know what will happen with our production workers in Taiwan," a middle management worker at one of Taiwan's top-five notebook manufacturers said yesterday.

Analysts anticipate a major shift in production next year.

"Production-line workers will soon be made redundant as more than 60 percent of notebook production will be in China next year," said Martha Chen (陳洪), an analyst at Primasia Securities in Taipei.

But Inventech may soon hire people in other areas, Hsu said. "We will be recruiting more R&D people," he said, refusing to disclose how many researchers would be needed.

Some of Taiwan's largest manu-facturers, meanwhile, say they have no plans to reduce staff.

A source at Wistron Inc (緯創資通), which makes notebook PCs for Acer Inc (宏電) and some foreign vendors, said the company had no plans to lay off any workers. The source refused to confirm how much of Wistron's notebook production is now in China.

Taiwanese companies are already making more high-tech products overeseas than they are in Taiwan, with most products being made in China, according to center statistics. Only two in every five Taiwanese computer products are currently being made in Taiwan.