Quanta Computer Inc (
"The complexity of the joint venture is greater than we expected," Quanta said in a statement released yesterday.
The two companies differ in their global positioning in the flat-panel television business and in issues such as organizational restructuring and these differences have prompted the postponement to next year, according to the statement.
In March, Quanta announced plans to join forces with Sanyo to establish a flat-panel TV venture in the third quarter, which would require initial capital of US$65 million. Shareholding details were not disclosed at the time.
The move reflected Quanta's attempt to cash in on the booming flat TV industry, which is set to expand rapidly over the next five years, Michael Wang (王震華), Quanta's chief operating officer, said on March 17.
The delay of the proposed venture was also apparently caused by weaker than anticipated market demand.
"Demand in Europe was weaker than expectated during the second quarter. But, at the moment, we will keep our forecast for global LCD TV sales at 42 million sets unchanged," said David Hsieh (謝勤益), a director of market researcher DisplaySearch's Taiwanese branch.
Recently, demand in the European and Chinese markets has started picking up, which would help shift inventory piled up during the last quarter and stabilize TV panel prices at US$350 per unit, Hsieh said.
Besides, second-tier TV vendors in North America planned to cut the prices of 32-inch and 37-inch TV sets to US$699 and US$999 to spur demand in the final quarter, Hsieh said.
Despite these market uncertainties, Quanta said its venture plans with Sanyo will be realized next year.
"Discussions are currently underway and we are working toward the goal of establishing the venture next year," Quanta's acting spokesperson Carol Hsu (許昭瑾) told the Taipei Times in a phone interview yesterday.
But for now, Sanyo will spin off development and purchasing operations of its TV business to put together a new company, tentatively called Sanyo Visual Technology Inc, in October.
Quanta will pump in ?85.5 million (US$740,000) for a 19 percent stake in the new company, which is to be based in North America.
Quanta will also offer its development resources to Sanyo Visual Technology and both will work on the purchase of materials and components, in order not to miss out on the year-end holiday shopping spree, Hsu said.
Quanta's shares closed down NT$0.4 percent at NT$46.4 yesterday on the Taiwan Stock Exchange. Shares of Sanyo rose 2.7 percent to ?26 yen on the Tokyo Stock Exchange. The announcement was made after markets closed in both Taipei and Tokyo.
"The postponement reveals that both firms are not yet fully ready to co-operate in the flat-panel TV industry. The October alliance will instead require less resources compared to the proposed venture," said David Chen (陳賜賢), an analyst with Taipei-based Market Intelligence Center (資訊市場情報中心).
The delay will not cause a stir in the market, considering the two firms are not major players in the flat-panel TV industry, he said.
As the venture will carry out both brand and contract production, this will limit the scope for expansion as there will be conflicts among contract clients, Chen added.
Quanta said it shipped 350,000 flat panel televisions last year, translating to a mere 2 percent of its overall revenues. It expected the new venture to double the quantity of shipments.
Another analyst said the delay would have little effect on Quanta.
"The deferral will have a very minimal impact on Quanta as the planned joint venture is not as important as it was earlier in the year," said Daniel Wang (
At the time, Quanta had hoped to sell TV panels made by its then LCD panel manufacturing affiliate Quanta Display Inc (
There was no need for this now as the computer maker had already sold the display unit to the nation's top panel maker AU Optronics Corp (友達光電) in June, Wang said.
"Quanta now counts on making laptops for generating profits, not assembling LCD TVs," he reasoned.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
RSS