Asustek trims back workforce

Asustek Computer Inc (華碩電腦), the world's biggest computer motherboard maker, yesterday confirmed that the company has trimmed about 2 percent of its local workforce to further cut costs.

"[Reducing employee numbers] is becoming a trend as every company is facing competition from rivals around the world," Asustek chairman Jonney Shih (施崇堂) told reporters yesterday at the Computex Technology Show. "We are very conservative about this [reduction of staff]. The layoff was much smaller in number compared with most local companies."

The company axed less than 200 workers, making up about 2 percent of its 8,000 employees in Taiwan, Asustek spokesperson Sunny Hang (韓德行) said.

Asustek only relocated half of its production to China, much lower than most Taiwanese electronics makers, such as Compal Electronics Inc (仁寶) and Inventec Corp (英業達), which have moved almost all of their production to China.

Asustek's move also reflects the global trend toward moving the manufacturing of electronics to China, taking advantage of its cheap labor, as the company is building a second plant near Shanghai. The factory is valued at US$1.5 billion, according to the Beijing News.

Construction started this month and the company has already received the Taiwanese government's approval for an initial investment of US$25 million, deputy company spokesman Steve Chen (陳舜平) said in an interview.

Chen declined to confirm the value of the project or production details.

The new plant will start production next year and will make notebook computers, liquid-crystal-display televisions and mobile phones, the Beijing News reported yesterday, citing an unidentified company official. The factory will be bigger than Asustek's current plant in Suzhou, which is about an hour from Shanghai, according to the newspaper.

A local Chinese-language newspaper reported yesterday that Asustek may ship 3.8 million notebook computers this year, up 32 percent from 2.88 million last year. Of the total, 1.5 million notebook computers will bear the company's own brand name, up 72 percent from last year, the newspaper said, citing the report to be distributed at an annual shareholders' meeting on June 9.

Asustek plans to ship 52 million motherboards this year, the newspaper reported.

Shares of Asustek fell 0.5 percent to NT$86.60 yesterday. The stock has gained 16.9 percent in the past 12 months, compared with a 0.6 percent increase in the benchmark TAIEX.