Oct. 17, 2000

The Japan-based Fujitsu-Siemens, the second largest notebook PC manufacturer in Japan, has decided in principle to place orders with Quanta Computer Inc. of Taiwan for the manufacture of its new notebook PCs, local media reported.

Beginning in the second quarter of 2001, Quanta will manufacture the new notebook PCs on an OEM basis. Fujitsu-Siemens maintained a long-term OEM relationship with Compal Electronic Inc., but this cooperation will reportedly terminate by the end of the first quarter of 2001.

One local newspaper reported that Quanta, on its request, would neither confirm nor deny the news of the deal.

Second only to NEC, Fujitsu-Siemens fares will in notebook PCs in Japan and ranks as the sixth largest manufacturer in the world. The firm has become increasingly successful by developing several latest notebook PC models in recent years. One supports Transmate microprocessors and another model AMD ( Advanced Micro Devices )

It is reported that sales of Quanta to Fujitsu-Siemens will reach 20,000 units per month beginning February 2001. This number is close to that of Compal's OEM suplly in the past.

Due to the change, Compal estimates its notebook PC sales to decline to about 5,000 units, down from 10,000 units per month, beginning in October. However, Compal expects sales to both Dell and HP to keep growing in 2001. This, together will new orders from the Legend Group of China, will help Compal to lift total sales to three million notebook PCs news year, Chen Ray-chung, president of Compal said in Taipei.

In related news, Quanta claimed Tuesday that it will set up a large R&D center in Linkou, a location close to Taipei, where Quanta also has its headquarters. The center is to focus on the development of displays, wireless telecom products and information appliance products. This will be the first such facility from a local notebook PC manufacturer in recent years. Quanta will also solicit investment from its foreign customers in the joint venture, according to reports.