Mon, Aug 22, 2011 - Page 12 News List

Officials mull impact of HP’s PC decision on local enterprises

DOMINO EFFECT:The spinoff or sale of HP’s PC division could have a major impact on Taiwan’s supply chain companies, including brand and contract makers

By Jason Tan  /  Staff Reporter

Global PC giant Hewlett-Packard Co’s (HP) plan to spin off its personal computer business has attracted the close scrutiny of the government because any move by the US firm is certain to affect Taiwanese supply-chain companies and local contract PC makers.

The potential sale of HP’s PC business to South Korea’s Samsung Electronics Co would deal a further blow to Taiwan, because the two countries are in head-to-head competition in PC and related businesses.

The Chinese-language United Daily News and Central News Agency yesterday reported that the Industrial Development Bureau (IDB) had been engaged in heated discussions with the government-funded Institute for Information Industry (資策會) and other research institutes for the past two days over the matter.

The reports said the bureau could present its analysis to Minister of Economic Affairs Shih Yen-shiang (施顏祥) today. The ministry also planned to invite comments from companies such as Acer Inc (宏碁), Asustek Computer Inc (華碩) and Inventec Co (英業達) about the possible impact on local PC makers and the contract manufacturing sector, the report said.

A bureau official contacted by the Taipei Times yesterday confirmed that the ministry was closely monitoring HP’s moves and was seeking input from the industry as well as research institutions.

“We are paying close attention to developments and have engaged research institutions for related analysis,” Industry Development Bureau deputy director-general Chou Neng-chuan (周能傳) said by telephone.

Chou said the bureau had also talked to Taiwanese companies in the supply chain to garner more feedback.

However, he said the bureau had not yet set a date to brief the minister nor formulated any contingency plans.

“This is, after all, the working of the market and we can’t speak for any individual company becuase that could affect share prices,” he said.

As with IBM Corp’s sale of its PC business to Lenovo Group Ltd (聯想) in 2005, the possible spinoff or sale of HP’s PC division would affect Taiwanese supply chain companies, including brand and contract makers, Chou said.

“The ministry would try to help local firms weather any possible impact,” he added.

In addition to its major Taiwanese suppliers Quanta Computer Inc (廣達) and Inventec, HP contributes 5 percent to 10 percent of revenue for Hon Hai Precision Industry Co (鴻海), Wistron Corp (緯創), Catcher Technology Co (可成), Chicony Electronics Co (群光), Shin Zu Shing Co (新日興) and Ju Teng International Holdings Ltd (巨騰).

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