Major IT firms to join IA project for developing complete cars

Taipei, Aug. 30, 2005 (CENS)-- At least four information technology (IT) and electronics conglomerates have expressed willingness to invest in a complete-car development project initiated by the government, according to Ministry of Economic Affairs (MOEA).

MOEA officials confirmed that Hon Hai Precision Ind. Co. Ltd. (the world's largest maker of barebone PCs, connectors and game consoles and the No. 1 private manufacturer in Taiwan), Asustek Computer Inc. (the world's No. 1 supplier of computer motherboards and a leading notebook PC maker), Quanta Computer Inc. (a leading notebook PC contract supplier to many big international brands), and Compal Electronics Inc. (a leading IT, electronics conglomerate), have decided to invest in the government-initiated IA (IT & Automobile) complete-car development project.

Under the project, a new company is scheduled to be set up in September or October to serve as an important platform for Taiwan to win international auto-electronic business opportunities.

As the island is already a global production base for IT, electronics, and auto-parts products, MOEA estimated that the production value of Taiwan's auto-electronic parts would reach about NT$600 billion (US$ at US$1: NT$32.3).

MOEA officials pointed out that the ministry mapped out the IA project mainly to establish Taiwan's own complete-automobile development capability and to tap auto-electronic business in rising regional automobile markets such as mainland China, India, and other Southeast Asia countries. MOEA hopes to help local automotive industry join big international auto and parts makers' supply chains by integrating resources of the island's strong IT and electronic lines, the officials added.

According to MOEA, the government and some private companies plan to invest about NT$5 billion (US$154.8 million) in the IA project during the initial stage, in which local Yulon Group (Taiwan's largest automobile-production conglomerate that locally makes Nissan and Mitsubishi cars) will have a 50% stake, the Executive Yuan Development Fund 30%, and the said four IT and electronic conglomerates and Globaltop Partner I Venture Capital Corp. 20%.

Chen Kuo-rong, president of Yulon Group, said the scheduled new company would target some auto-electronics parts for priority development. He continued that it takes several months to four years to develop a new auto-electronic parts.