Tue, May 27, 2003 - Page 10 News List

Quanta to invest billions in R&D

INCREASING EFFICIENCY The nation's largest laptop manufacturer hopes to build a next-generation flat-panel display manufacturing plant to compete with South Korea

By Bill Heaney  /  STAFF REPORTER

Taiwan's largest laptop computer manufacturer, Quanta Computer Inc (廣達電腦), plans to invest NT$115 billion in a new research center and next-generation flat-panel manufacturing facilities, an official at the company confirmed yesterday.

During the weekend, the company's CEO Barry Lam (林百里) broke ground on the new Taoyuan research and development center near the international airport.

"The investment figure will be around NT$4 billion to NT$5 billion for the research building and the associated software," Quanta spokesman Jason Lin (林群傑) told the Taipei Times yesterday. "We are trying to recruit as many new engineers as possible to work on new technologies, including new consumer projects."

Local media have speculated that up to 5,000 engineers will find jobs at the facility, which is expected to open in the fall of next year.

The facility will develop new consumer products, possibly including the latest advanced flat-screen televisions.

"I think the new research facility will be developing multimedia consumer products," said Martha Chen (陳紅), an analyst with Primasia Securities Co. "Quanta's CEO has said he is more interested in liquid-crystal display [LCD] televisions, saying these will be the only source of growth for the company in the future."

Another analyst agreed.

"It looks like Quanta is shooting for the LCD monitor and LCD TV market," said Debbie Wu (吳岱玲), a flat-panel industry analyst with Yuanta Core Pacific Securities Co (元大京華證券).

"Quanta used to have only one 3.5G fab which they used only to feed in to their notebook business, but with their 5G fab now on-line, it looks like they plan to make LCD monitors and TVs as well," she said.

Fifth-generation, or 5G, flat-panel plants are currently the most efficient in the industry, producing bigger quantities of larger panels than older 4G and 3G technologies.

Quanta is well-placed to make LCD TVs. The company's flat-panel unit, Quanta Display Inc (廣輝電子), is a joint venture between Quanta Computer and Japan's Sharp Corp, pioneers in flat-screen television technology.

To make the flat-screen TVs and monitors, Quanta Display is planning to spend NT$110 billion constructing a new flat-panel factory in Northern Taiwan, Lin confirmed yesterday.

Quanta Display is surveying suitable sites in Taoyuan, but it is unclear whether the new facility will use the current leading fifth-generation, or 5G, technology, or whether it will make the jump to 6G or 7G technology.

With each new generation technology, the flat-panel industry moves to larger panels and a more efficient production process, thereby saving costs and increasing output.

"Right now Quanta Display has a 5G fab," Lin said. "The new fab will be a next generation plant."

Lin could not confirm how many new employees the plan will require, or when it would be completed, but analysts say the new plant won't be needed for at least 12 months.

"As Quanta's 5G plant just went on-line last month, I don't expect the next-generation plant to open before the second quarter of next year," Yuanta's Wu said.

Some in the industry have talked about leapfrogging the next generation to catch up with rivals in South Korea who are six months to a year ahead of the Taiwanese.

"The Taiwanese know they have to invest a lot of money in the new technology," Wu said. With one new flat-panel production line costing between NT$30 billion and NT$40 billion, Quanta's planned investment would fund three new production lines.

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