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Asustek Teams up with I-Berhad to Make Notebooks

Asustek Computer Inc of Taiwan, one the largest motherboard-makers in the world, has teamed-up with local home appliance manufacturer I-Berhad to develop and assemble a range of notebooks for the local market.

The tie-up is the first for the Taiwanese company with a Malaysian company for the production of notebook computers.

The initial co-branded "i-Asus" notebook launched in August comes in two flavors - an entry-level model powered by a Celeron 700MHz chip, and an 800MHz Pentium III-powered model targeted at executives.

At the signing of the agreement, I-Berhad chief executive Eu Hong Chew said the company plans to derive about 10-15% of its revenue from notebook sales.

"We have to learn very fast, given the fact that we moved from manufacturing home appliances, which have a life-cycle of between three and four years, to the information technology sector, which has a fantastically shorter life-cycle of three and four months," Eu said.

I-Berhad, which mainly produces air-conditioners, refrigerators, fans and rice cookers, made an aggressive foray into computer manufacturing last year. It has since emerged as a fast-rising player for desktop PCs after prior tie-ups with Intel Corp and another Taiwanese computer company, First International Computer Inc.


The home appliance-maker is re-shaping itself to become a provider of a variety of "Smart Home" products by 2003, and hopes to interlink home appliances using available computing and connectivity technology by then.

At the same signing ceremony, Asustek vice-president of sales and marketing Jonathan Tsang said the Taiwan company is projecting sales of about 800,000 notebooks this year globally, up some 33% compared to last year.

He added the company's motherboard sales are expected to rise to 18 million units compared with 14 million in 2000. Asustek has a 25-29% share in the Japanese motherboard market.

Taiwanese manufacturers have been banking on an uptake in the European market to counterbalance a lackluster US market in recent quarters.

Tsang was optimistic about 2001 sales, despite the bearish reports on technology markets around the globe. "We are confident of achieving a 30% increase in sales this year as compared with last year. We still believe in our NT$90 billion [about US$2.6 billion] revenue forecast for this year," he said.

Asustek management earlier indicated plans to ramp up production motherboards for Pentium 4 by the end of this year in response to Intel's decision to cut the prices of the processors by the third quarter.

Tsang added that the Asustek, which has a foothold in Suzhou, China for the manufacture of motherboards, was also keen to raise its stakes there if it gained approval from the Taiwan authorities. "We already have some US$120 million approved by the Taiwanese government for investments in China," he said.

Despite a strong brand name, supplying to top customers such as Sony Corp and Hewlett-Packard Co, Asustek in recent years has taken bold moves to diversify its product range and reduce reliance on motherboard sales, which account for around 55% of total revenues now compared to about 80% two years ago.

Apart from notebooks, Asustek currently also makes personal digital assistants (PDA), cable modems and ADSL modems.

by Julian Matthews, Kuala Lumpur

(October 2001 Issue, Nikkei Electronics Asia)

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