Wed, Sep 09, 2009 - Page 11 News List

Hon Hai works on laptops using ARM’s technology

RIVAL ARM, whose chips are used in Apple’s iPhone and Palm’s Pre handset, is battling Intel over control of the market for more affordable notebook computers


Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract maker of electronics, said it is developing notebooks using ARM Holdings Plc’s technology for sale by Chinese phone operators.

“We’ve heard requests from the telcos” for laptops that sell for less than US$200, Young Liu (劉揚偉), special assistant to Hon Hai’s chief executive officer, said yesterday, without naming the clients.

The laptops would use a Hon Hai version of the Linux operating system and may go on sale next year, he said.

ARM, whose chips are used in Apple Inc’s iPhone and Palm Inc’s Pre handset, is challenging Intel Corp in the market for low-cost notebook computers.

Hon Hai is developing as many as five laptops with screens smaller than 10 inches that will use ARM technology, putting pressure on Intel to offer cheaper options, Liu said.

“It’s largely for the China market — they want something cheaper,” Liu said. “If it’s above $200, 10 inches to the Chinese is too small; if it’s 10 inches, $200 is too expensive.”

“Operators will be more keen to bundle ARM on netbooks because Intel is heavier and requires more resources,” Daniel Chang (張博淇), an analyst at Macquarie Group Ltd in Taipei who rates Hon Hai “outperform,” said by telephone. “Intel is under a lot of pressure.”

ARM develops cores, the heart of a processor, which are then used in semiconductors from chip designers including Qualcomm Inc and Texas Instruments Inc.

“Competition is good. It breeds innovation and ultimately customers benefit,” said Nick Jacobs, a Singapore-based spokesman for Intel.

Intel had 86.9 percent of the laptop processor market in the second quarter, researcher IDC wrote in an Aug. 6 press release.

The chipmaker’s Atom chip, used in low-cost notebooks called netbooks, posted a 34 percent increase in unit sales during the quarter, from the previous three-month period, IDC said.

Hon Hai climbed 3.6 percent to close at NT$128 in Taipei trading before Liu spoke, the highest since Aug. 27 last year.

The stock has more than doubled this year, compared with a 59 percent advance by the benchmark TAIEX index.

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