MiTAC Technology Corp (神基科技), the nation's second-tier computer manufacturer, yesterday announced the acquisition of a component maker through a share swap.
The company is set to issue 169.28 million new shares, and shareholders in MiTAC Precision Technology Corp (MPT,
MPT makes components for tech products such as digital cameras, flat televisions and game consoles.
Both MPT and MiTAC Technology -- which produces rugged computers for military use -- are affiliates of Mitac-Synnex Group (
The merger is expected to be completed by the end of August.
"The acquisition is expected to improve our vertical integration capability by offering component production in the future," Francis Tsai (
He said that although MPT was able to offer a total mechanical manufacturing solution, it lacked the competency to come up with end products.
Therefore, the combination of resources from both parties would benefit MiTAC Technology in the future, offering the maker an advantage in the manufacturing process that will attract more clients, he said.
Industry watchers were not surprised by the news.
"A number of computer firms have been beefing up their integration capabilities, and it was inevitable that MiTAC Technology would follow suit," said Albert Chen (陳立恆), an analyst with researcher Market Intelligence Center (資訊市場情報中心).
In July last year, Elitegroup Computer Systems Co (
MiTAC Technology is losing out to first-tier makers in terms of production volumes and will not make much progress in volumes as demand in the niche market is limited, Chen said.
But the company could utilize resources within the group to focus on other mobile devices, such as global positioning systems, he said.
Shares of MiTAC closed up 1.4 percent to NT$14.85 (US$0.45) on the Taiwan Stock Exchange yesterday. The merger announcement was made after the close.
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