Fri, May 09, 2008 - Page 11 News List

Price increase on Quanta and Asustek's 'wish list'

BLOOMBERG AND DPA , TAIPEI

Quanta Computer Inc (廣達電腦), the world's largest maker of notebooks, and Asustek Computer Inc (華碩電腦), the biggest maker of boards which connect computer parts, said they are trying to increase prices as labor and materials costs rise.

“Customers are willing to listen to this kind of request, whereas before it would be very difficult to raise prices,” Elton Yang (楊俊烈), spokesman for Taoyuan-based Quanta, said by telephone yesterday.

“This price increase is on our wish list,” Yang said.

Quanta and Asustek join Compal Electronics Inc (仁寶電腦), the second-largest laptop maker, whose clients include Hewlett-Packard Co and Dell Inc, in attempting to pass on expenses to customers. Compal said earlier this week it was prepared for fewer orders this quarter if clients won’t pay more.

“It could be a good chance to raise prices as costs increase, but who knows” if it will be possible, said Nick Wu (吳長榮), spokesman for Taipei-based Asustek.

The price of copper climbed 80 percent and labor costs in China jumped 25 percent in the first quarter from a year earlier, Compal president Ray Chen (陳瑞聰) said on May 6.

A Chinese labor law that took effect on Jan. 1 mandates minimum wages and severance pay, which has contributed to high employee costs there.

Both Quanta and Compal have said they are looking at building factories in Vietnam, which has lower wages, to cut costs and diversify from China, where more than 90 percent of both companies’ production capacity is located.

Compal Electronics also plans to build a notebook computer plant in Poland and another in Brazil, while closing its plant in Manchester, England, the Chinese-language Economic Daily News reported yesterday.

Chen said that Compal planned to diversify investment because of the difficulty in expanding notebook computer output in China, caused by transport and component supply problems, the newspaper said.

In the initial stage, the plants in Poland and Brazil will take care of notebook computer repair, but they would start manufacturing notebook computers later this year should demand arise, the daily quoted Chen as saying.

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