X-bit labs

ASUSTeK Acquires a Facility from ECS.

Category: Other

by Anton Shilov

[ 03/31/2003 | 04:49 PM ]

ASUSTeK began unprecedented campaign of expanding its own manufacturing capabilities by acquiring facilities from other companies. The first firm to sell a fab to ASUS became one of its arch-rivals in the mainboard business, Elitegroup Computer Systems, according to DigiTimes.

The Chungli facility where ECS makes iBook notebooks for Apple computer is able to manufacture from 150 to 200 thousands of notebooks per one month. Under the terms of the agreement, ASUS will pay $5.76 million for the factory and the land it is located on, nearly $2.54 million for the equipment and also will also buy the material stock that will be left after the 30^th of June. The deal is expected to be formally closed on the same date.

Presently ASUSTeK can produce roughly 100 thousands notebooks in its Suzhou facility and from 60 to 70 thousands in it Peitou district fab. With ECS’ Chungli factory, ASUS doubles its manufacturing capacities. ASUS has a lot of orders on its system products, such as ADSL modems, cable modems, servers, WLAN (wireless local area network) modules and PDAs. As a result of pretty successful business, the company has seen very tight manufacturing capacities.

ECS will continue to produce its notebooks where it produces its DeskNote PCs, at the facility in Dongguan, Guangdong Province. At the moment officials from the company did not say whether or not the company’s OEM clients, such as Apple Computer, will transfer its production orders from Chungli fab to Dongguan plant. Maybe Apple as well as numerous other companies from Western countries will prefer to stay at the same fab, but with ASUS.

It is also not clear why did ECS decidedto sell its fab, keeping in mind that the company acquired a number of smaller firms during previous couple of years. Maybe ECS has seen tumble in demand on its products and decided to sell a factory in order to pay the current bills and receive money on other investments? As always, only time and people with knowledge of the matter will tell this.

ASUS reportedly plans to acquire four more plants in Asia later this year.