Compal Electronics Co (仁寶電腦) is to reopen its plant in Taoyuan next quarter to meet a client’s requirement for commercial notebook PCs manufactured in Taiwan, a company executive said yesterday.
Compal president Ray Chen (陳瑞聰) said that the client specifically requested that the company manufacture the products in Taiwan for a government project, which requires a high standard of information security measures.
At the firm’s annual general meeting, Chen said that the reopening of the Taoyuan plant would contribute to the nation’s exports and employment.
The company plans to recruit hundreds of local and foreign workers, and is to ship 500,000 notebook PCs per year from the plant to meet the client’s needs, he said.
As part of a strategy to reallocate Compal’s resources due to tightening labor policies and rising labor costs in China, Chen said the company plans to start shipping smartphone products from its existing plant in Vietnam in the fourth quarter of this year.
Labor shortages in eastern and central China have increased Compal’s labor costs and affected its gross margin. Wage increases in China also pose a risk to the industry’s long-term development, Chen said.
Chen said the company has no plan to set up plants in India for the time being.
A Compal official, who declined to be named, told the Taipei Times that investing in India would require the resolution of some key issues, such as support from the Indian government and cultural and societal differences.
Commenting on Compal’s smart devices business, Chen said he expects smartphone shipments, which accounted for 10 percent to 12 percent of the firm’s total revenue last year, to grow by at least 50 percent this year, as the company successfully entered the supply chains of two new smartphone maker clients.
In the notebook PC segment, which contributed 78 percent to 79 percent of the company’s revenue last year, Chen said replacement demand spurred by the release of Microsoft Corp’s Windows 10 operating system is expected to materialize in August and September.
Compal plans to start shipping notebooks PCs running Windows 10 at the end of next month, he said.
In the first quarter, Compal’s net income totaled NT$2.02 billion (US$64.89 million), or NT$0.47 per share. That was a significant improvement from the same period last year, when the company posted a net loss of NT$2.26 billion after it booked NT$4.7 billion in investment losses for Chunghwa Picture Tubes Ltd (中華映管).
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