Tue, Apr 22, 2014 - Page 13 News List

Wistron invests in touchscreen panel maker

DIVERSIFICATION:An analyst questioned the PC company’s investment choice, citing the slower-than-expected penetration of touch-enabled panels

By Helen Ku  /  Staff reporter

Computer contract manufacturer Wistron Corp (緯創) yesterday confirmed it had invested US$3 million in a US company that makes tactile touchscreen panels, as the company seeks to diversify its product mix to stay competitive in the post-PC era.

The deal follows Wistron’s announcement in February that it would invest NT$560 million (US$18.5 million) in a Malaysian speaker vendor, Formosa Prosonic Industries Berhad.

“We had invested US$3 million in Tactus Technology Inc,” Wistron chief financial officer Henry Lin (林進財) said in a filing with the Taiwan Stock Exchange.

The statement came after the Chinese-language Economic Daily News reported on Saturday that Wistron invested US$10 million in Tactus to make touch panels.

Lin did not elaborate on why and when Wistron made the investment in Tactus. He said the company would publicize more financial information about its foreign investment plans in the future.

According to the newspaper report, Wistron would offer funds to the Fremont, California-based company for product research and development so as to help the Taiwanese firm gain competitiveness in touchscreen-related business.

Founded in 2008, Tactus develops tactile touchscreens that are mostly used in consumer electronics such as smartphones and tablets. Unlike typical touch-enabled user interfaces for handheld devices, tactile touchscreens feature physical buttons that rise and fall from touch panels based on changes in the interface.

The special design of Tactus’ touch displays is aimed at helping people type correctly on their handsets as if they are using physical keyboards, the US company said on its Web site.

However, Taipei-based Daiwa Securities analyst Steven Tseng (曾緒良) said Wistron’s investment was “a bit risky,” as the flat-panel industry is facing severe pricing competition because of the slower-than-expected penetration of touch-enabled panels.

“Wistron needs to be focused,” Tseng said by telephone.

“It’s not a bad thing to diversify a company’s product portfolio to reduce risks, but Wistron appears to be making too much diversification that may only bring itself more burden than gains,” he said.

Like its bigger domestic rivals Quanta Computer Inc (廣達) and Compal Electronics Inc (仁寶), Wistron aims to improve its profitability as the PC contract manufacturing industry faces consolidation due to weakening demand for PCs. However, it should evaluate if it has misallocated its limited resources, Tseng said.

“The possibility for Wistron to generate return on its investments is a question, in both short and long terms,” Tseng said.

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