Sat, Aug 25, 2007 - Page 12 News List

Quanta's board picks new president

REPLACEMENT Vice chairman C.C. Leung will take over after Michael Wang resigned because of differences with management over the company's development roadmap


Quanta Computer Inc (廣達電腦), the world's biggest notebook computer subcontractor, said yesterday that the board of directors had tapped vice chairman C.C. Leung (梁次震) to replace outgoing president Michael Wang (王震華).

Quanta's board approved a resolution appointing Leung as president after Wang filed his resignation yesterday morning.

Wang, who has been on leave since June 25, will also resign from the board to pursue a new career, the company said in a filing to the Taiwan Stock Exchange.

Quanta's shares jumped 4.3 percent to close at NT$55.3 on the local exchange yesterday, outperforming the benchmark TAIEX's 0.49 percent loss, after Wang's resignation was confirmed, prompting speculation that his leaving would clear a major obstacle for the merger of Quanta and Hon Hai Precision Industry Co (鴻海精密).

Although both companies have repeatedly denied any plans for a merger, some investors believed Wang's resignation was related to his opposition to a merger with the world's biggest electronics manufacturing service provider.

"Wang's departure may have a positive impact on Quanta's shares as long as the speculation about a merger with Hon Hai continues to circulate," said Vincent Chen (陳豊丰), a Taipei-based computer industry analyst with CLSA Ltd.

With Hon Hai's extensive electronics component support, the merger can help Quanta cut costs further and boost the laptop maker's market position, Chen said.

Wang's resignation should not result in a significant loss in orders or market share in the near term, as Quanta has secured orders from major customers, including Dell Inc, for next year, Chen said.

"The appointment of Leung will be a great help to keep Quanta's operations on track and stabilize employee morale," Chen said.

Quanta's bottom line may improve slightly after Leung takes the helm, he said, citing Leung's good execution ability.

Wang and Leung co-founded Quanta with company chairman Barry Lam (林百里) in 1988.

Quanta's management change came after Wang issued a letter to employees yesterday morning announcing his departure. In the letter, he expressed his dissatisfaction with the company's growth strategy and clarified his stance about any form of cooperation with Hon Hai.

Wang said it would benefit Quanta more to form an alliance with Hon Hai than directly compete with it, according to a copy of the letter posted on the Chinese-language online news Web site

Wang, 52, implied in the letter that his resignation stemmed from disagreements with the company's management team in drawing a roadmap for the notebook computer maker's future, which is facing growing challenges amid rising domestic competition.

"As long as no consensus on the company's future development strategies can be reached, I can only painfully let go of the baby [Quanta] to which I have dedicated 19 of the prime years of my life," he wrote.

Wang has long advocated diversifying the company's business to pursue new products and growth drivers.

In the letter, he expressed regret that Quanta had missed a good chance to do so via acquisitions over the past three years, and the firm had started to feel the pinch of weakening competitiveness.

"If this company relies entirely on organic growth, it will not be sufficient," he said.

Because of "management's inability to reach consensus on strategy, opportunities have slipped away, one by one," he said.

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