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Taiwan-based medias report that as Quanta Computer, the world’s largest contract maker of notebooks, slashes its notebook production projections for 2006, Foxconn Electronics may be looking forward to “merge” with the company.

Chinese-language Economic Daily News (EDN) quoted its sources as saying that Foxconn Electronics may merge with Quanta Computer, reports DigiTimes web-site. The news-paper reportedly also stated that analysts from Europe-based investment banks were indicating that the two companies have been in talks about a merger since March.

Meanwhile, China Economic News Service reported that Quanta Computer recently downward adjusted this year’s shipment goal to 21 million units of laptops from the 24 million units predicted earlier. In the beginning of the year Quanta was reported to expect 25 million of its notebooks to be shipped. The decrease of the expectation is associated with slow demand for mobile computers in the first half of the year.

At the same time, the same source claims that Compal, the world’s No. 2 maker of notebooks, has not reduced its shipment goal from 15 million units in 2006.

If Foxconn merges with Quanta computer, it will boost its own notebook production and will become the world’s largest maker of mobile computers significantly outpacing the rivals, such as Compal, Asustek Computer or Arima, substantially increasing pressure on the remaining players.

Foxconn and Quanta both reportedly denied the information on August 14, stressing that the companies have no knowledge of a merger, the paper noted.

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