Tue, May 09, 2006 - Page 12 News List

Dell to boost its Taiwan buying

CLOSE PARTNERSHIPS An executive from the US personal computer giant said it would increase its sourcing from Taiwanese suppliers to US$12.5 billion this year

By Jason Tan  /  STAFF REPORTER

Dell Inc, the world's largest personal computer vendor, aims to deepen its relations with local technology suppliers this year by increasing procurement in Taiwan by more than 20 percent, a top executive said yesterday.

The US computer maker purchased US$10 billion worth of components from Taiwanese suppliers last year, and the amount is set to expand to US$12.5 billion this year, he said.

Procurement in 2004 was US$8 billion.

"Our partnership with Taiwanese companies involves those renowned in the industry. I believe it will continue for both parties," Kevin Rollins, Dell's president and chief executive officer, told a press briefing in Taipei.

Currently, local electronics heavyweights including Hon Hai Precision Industry Co (鴻海精密), Compal Electronics Inc (仁寶電腦), Asustek Computer Inc (華碩電腦) and Quanta Computer Inc (廣達電腦) are working closely with Dell in the latter's supply chain.

Rollins did not rule out the possibility of working with more local partners to cope with the larger procurement demand in the future.

The 53-year-old Rollins, who assumed the CEO position in July 2004, was in Taipei yesterday for a one-day visit to meet suppliers and employees.

The company said it was set to employ 330 staff ranging from sales and procurement staff to research and development engineer by the end of this year at its Taiwan Design Center, boosting its local manpower to 400.

Set up in 2002, the center is responsible for over 30 product designs. It currently churns out around half of Dell's notebooks and all of its single-socket servers, according to Rollins.

Rollins brushed off concerns over reports that Quanta has succumbed to Dell's request to give back a 1.5 percent rebate for orders Quanta received last year.

DigiTimes reported on April 26 that Dell demanded that Taiwanese notebook makers including Quanta, Compal and Wistron Corp (緯創) rebate 3 percent of their total profits derived from Dell's orders last year to secure their orders for this year.

"We don't disclose deals in public. And we negotiate with our suppliers in a spirited, friendly ambience," Rollins said.

Dell, started by Michael Dell in his dorm room at the University of Texas at Austin in 1984, grew in 20 years to become the world's No. 1 personal computer maker.

It succeeded by selling directly to customers on the phone and over the Internet, thereby circumventing retailers and undercutting competitors.

But the company cut prices on entry-level consumer computers too aggressively last year, slowing sales to US$55.9 billion last year, which was lower than analysts' expectations.

Now, Dell is looking at new products and services -- such as printers, computer services and data storage -- and emerging markets outside of the US, to revive the brisk acceleration.

Rollins appeared upbeat about the company's future.

"We are very confident on Dell's prospects. We are a growing company and we have been a growing company. You will see our accomplishments if you look at our past history, and the same kind of growth will continue," he said.

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