Tue, Jan 11, 2005 - Page 10 News List

Lenovo to increase orders

PROCUREMENT The firm plans to raise the amount it purchases from Taiwanese suppliers after wrapping up a merger with IBM, according to a newspaper report

STAFF WRITER , WITH BLOOMBERG

Lenovo Group, China's largest personal computer (PC) maker, plans to raise its purchasing in Taiwan to over US$5 billion this year after it completes a merger with IBM Corp in June, a Chinese-language press report said yesterday, citing Lenovo's Taiwan chief Lu Chien-chun (盧建軍).

The new Lenovo's amount of purchases will see an "active increase" after the company's international purchasing office (IPO) in Taiwan merges with IBM's IPO in the nation in June, the report cited Lu as saying.

The two companies' combined released around US$4.6 billion-worth of orders to Taiwanese suppliers last year, with IBM, which was the nation's fifth largest foreign buyer, purchasing US$3 billion PCs and Lenovo, which is ranked sixth, spending the remainder, according to figures from the Ministry of Economic Affairs.

An official from Lenovo said yesterday that the company could not comment on the report.

"We would of course continue to strengthen cooperative relations with Taiwan's suppliers after the merger," Angela Lee, Lenovo's media contact based in Hong Kong, told the Taipei Times yesterday.

"We do not disclose our purchasing amount, based on company policy," Lee said.

Lenovo's Taiwanese suppliers include Elitegroup, Gigabyte Technology Co (技嘉) and Micro-Star International Corp (微星), which manufactured the vendor's 3.8 million desktop computers last year, as well as Quanta Computer Inc (廣達電腦), Wistron Corp (緯創) and First International Computer Inc (大眾電腦), which supplied it with 350,000 laptops over the same time.

IBM's Taiwanese suppliers include Quanta and Wistron, which manufactured half of its 4 million laptops shipped this year and Universal Scientific Industry Co (環隆電器), Gigabyte, Elite and Micro-Star, which made 5 million desktops last year.

Lenovo also plans to start selling its PCs and consumer electronics, such as MP3s, in Taiwan in the second half of this year, the report said.

Lenovo agreed to pay US$1.25 billion for IBM's PC unit in a deal that made the Chinese company the world's third-largest PC maker and gave it a globally recognized brand.

Lenovo was the world's eighth-biggest PC maker before the purchase, which will raise to about 7 percent the company's share of the US$183 billion global market dominated by the US manufacturers Dell Inc and Hewlett-Packard Co.

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