Asustek to venture into auto-electronics business

Taipei, Jan. 7, 2005 (CENS)--Asustek Computer Inc., Taiwan's largest maker of motherboards, has unveiled plans to set up a new business team to tap the auto-electronic business in 2005.

The new team will be headed by Asustek's incumbent chief technology officer (CTO) Lin Shao-chang and may cooperate with local and foreign auto makers in the development of automobile integrated circuit (IC) chips and related system designs.

Industry sources said that auto electronics is a rapidly rising segment with unlimited business opportunities for information technology (IT) makers, which are facing a growth slow-down in the global PC market. Most leading auto makers in the world are actively developing auto-electronic businesses by allying with IT manufacturers, the sources added.

Other local leading IT conglomerates have announced plans to tap the booming business, including Hon Hai Precision Ind. Co. Ltd., the world's No. 1 maker of barebone PCs, connectors and game consoles, and MiTAC International Corp., a leading IT hardware manufacturing conglomerate.

A senior Asustek official claimed that his company has mapped out plans to expand products lines into different fields, including cell-phone, mini barebone system, liquid crystal display (LCD) TV and printer, in addition to already-leading businesses such as motherboard, notebook PC, graphic card and optical-disc drive. Asustek expects to further expand its business scopes and revenue in the next five years.

According to Asustek, the company's new auto-electronic business team will be responsible for integrating the company's available resources in IT, communication, consumer electronics, and IC design fields and developing new products at a full speed.

An industry insider said that a modern automobile consists of sophisticated auto-electronics techniques, including engine management system (EMS), vehicle-body control, intelligent transportation system (ITS) and many others, all of which are closely related to IC design and system integration capabilities.

The rapid advancement of auto-electronics technology has greatly boosted the safety and performances of automobiles. In the next five years, some industry experts estimated, the electronic devices are expected to account for over 25% of an automobile's overall costs, representing unlimited business chances for local IT and electronic manufacturers.

Asustek scored revenue of about NT$250 billion (US$7.76 billion at US$1: NT$32.2) in 2004 and profits of NT$16 billion (US$496.89 million), making it the second-highest profitability among local electronic makers, behind only Hon Hai.

In 2005, Asustek expects to have annual revenue of NT$400 billion (US$12.42 billion) and profits of over NT$20 billion (US$621.12 million), with major growth momentums to come from its barebone system, motherboard and notebook PC businesses.