Betting on bright prospects for the global flat-panel television market, Quanta Computer Inc (
The venture, with initial capital of US$65 million, is set to kick off in the third quarter, Michael Wang (
The shareholding proportion between the two firms was not disclosed, and Wang said that they will hammer out more details on plant construction, locations and manpower after completing due diligence over the next three months.
"We are banking on the flat-panel TV market, as it will expand at a rigorous pace over the next four to five years," he said.
According to Wang, flat-panel TVs -- including liquid-crystal-display (LCD) TVs and plasma TVs which came onto the market in 2002 -- will account for over 50 percent of the world's TV market as soon as 2009, pushing aside traditional cathode-ray tube (CRT) TVs.
That momentum is impressive considering that notebook computers, by comparison, will need around 18 years to take up half of the global computer market -- surpassing desktops PCs -- in 2008, he added.
He said that the booming slim-screen TV market presents new growth opportunities for Quanta, whose notebook segment contributed more than 80 percent of its overall revenues last year.
Quanta only shipped some 350,000 flat-panel TVs last year, generating a mere 2 percent of its overall revenues, the company said. It expects the new collaboration to raise to "more than double" this year's shipments from last year's, Wang added.
Sanyo, which is in the global top ten of flat-TV brands, has shipped 6.5 million to 7 million units of both CRT and slim-screen televisions annually, mostly to the US and Europe.
The alliance is part of a restructuring plan for Sanyo, which is forecasting a second straight year of record losses. The Japanese firm last July announced it would cut 14,000 jobs, reduce interest-bearing debt by 50 percent and form ties with other companies in a bid to return to profitability.
"Sanyo has the sales channels, and Quanta can offer superb manufacturing capabilities. The large volumes from Sanyo will improve our economies of scale, which will pull down our overall production costs," Wang said.
According to Ted Lu (呂哲強), Quanta's senior vice president, around one-third of the flat panels supplied to the new venture will come from Quanta Display Inc (廣輝電子), the nation's fifth-biggest LCD-screen supplier and an affiliate of Quanta Computer.
The partnership announcement was made after the stock market closed. Shares of Quanta Computer increased 4.3 percent to close at NT$52 while Quanta Display added 5.8 percent to close at NT$11.90 on the Taiwan Stock Exchange.
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