Quanta to acquire component makers in order to reduce costs

Local sources reported that Quanta computer Inc is currently in talks with

several components makers, which the company is expected to acquire in order to

reduce costs. Tim Li, CFO, Quanta, said the company allotted close to NT$1.0

billion to acquire at least five companies located in China, Taiwan and the US.

Li said, “The market is pretty mature right now, so if we want synergies,

mergers and acquisitions is probably the best strategy.” It is not just Quanta

that is planning to acquire component makers but also rivalry companies such as

Asustek, Compal and Hon Hai are following similar strategies. Acquiring

component makers may also help the company cut costs and gain expertise in new

products such as consumer electronics used for entertainment. “The company is

undertaking 'due diligence' of makers of components for notebook computers,

MP3 players and entertainment products,” Li noted. Internally, Quanta wants to

cut some non-profitable subsidiaries or product line such as Quanta Display to

AU Optronics.