HP's PC Strategy May Impact Taiwan's Contract Manufacturing Operation

Taipei, Aug. 22, 2011 (CENS)--Taiwanese hi-tech manufacturers are monitoring closely HP's plan to spin off or sell out its PC division, as HP has been the foreign company with the largest procurement amount in Taiwan in recent years.

Since 2007, HP has been procuring over US$20 billion worth of products in Taiwan. Thanks to the establishment of an R&D and information integration center in Taiwan, the amount grew 20% to US$25 billion last year, about 30% of total foreign procurement reaching US$85.3 billion (NT$2.47 trillion). It exceeded Dell, the runner-up, at US$15 billion by far.

HP shipped 46 million notebook PCs globally last year, which were almost entirely outsourced to Taiwanese contract manufacturers, notably Quanta, Wistron, Inventec, and Compal. In fact, it's the world's largest PC brand, with PC shipment, including desktop and notebook PCs, topping 64.2 million units last year, for global market share of 18.6%.

In addition, HP also procured large amount of FPD (flat panel display), DRAM (dynamic random access memory), and other ICT (information/communications technology) components and parts from Taiwanese suppliers, including AU Optronics, Chimei-Innolux, and Nanya Technology.

HP is the client for almost all major ICT contract manufacturers in Taiwan, including Quanta, Hon Hai, and Inventec, which have set up manufacturing facilities in Chongqing under the leadership of HP.

Rosemary Ho, chairperson of Global Mobile and former chairperson of HP Taiwan, urged yesterday (Aug. 21) that Taiwanese and mainland Chinese brands to acquire HP's PC division jointly, to alleviate the impact on Taiwanese manufacturers.