Acer Inc, the nation's largest personal computer maker, has decided to suspend plans to have its notebook PCs made in China, where more than 200 people have died of severe acute respiratory syndrome (SARS).
Instead, Acer will continue to place orders for notebooks made domestically, Wang Chen-tang (
Concerns that assembly lines in China may be shut down if workers become infected are behind the decision, he said.
The company had recently contemplated switching its orders to Quanta Computer Inc (
One industry analyst said SARS fears may slow down the pace of companies moving to China.
"Considering that the SARS outbreak may disrupt the supply chain, notebook PC companies are expected to temporarily freeze their investment plans in China," Chen Wen-tang (
The move is a reversal of what many analysts predicted would be a major notebook manufacturing year for China.
Last year, about 38 percent of the nation's notebook computer makers shifted orders to China. That figure was expected to surpass 50 percent this year.
But the re-emergence of Taiwan as the notebook production capital of the world is unlikely, since companies have already set up plants, recruited local talent and transferred management across the Strait, he added.
As early as late 2001, domestic notebook makers began to focus on China to capitalize on cheap labor and lower production costs after the government loosened restrictions on the sector.
Compal Electronics Inc (仁寶電腦), manufacturer of notebook computers for Hewlett-Packard Co, said earlier this week that the company may consider outsourcing production to second-tier contract makers in Mexico if its factories were forced to shut down because of SARS.
Computer makers such as Acer, Compal, Quanta Computer Inc (廣達電腦) and Mitac International Corp (神達電腦) have also banned visits between factories in Taiwan and plants in China to avoid the spread of the disease.
Government officials have floated plans to ban travel to China and Hong Kong, an idea called "not feasible" by industry officials.
"You can buy plane tickets on the Internet, but you risk having your new products copied if you transfer specifications on the Web." said Luo Huai-jia (
In related news, Acer yesterday said it expected a 10-20 percent year-on-year drop in sales of its IT products in China in the second quarter due to the spread of SARS.
Sales growth in China has fallen by half in recent weeks from an annual rate of about 60 percent.
However, Wang said China accounts for just six percent of Acer's global IT product sales and SARS is expected to have a limited impact on Acer's overall business.
The company has no plan to revise its 2003 sales forecast.
Acer has projected NT$125.8 billion in 2003 revenues to be generated by its global sales of information technology products, distribution business and electronics services.
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