MOEA Evaluates Impact of HP's PC Strategy on Taiwan

Taipei, Aug. 22, 2011 (CENS)--In response to the plan of Hewlett Packard to spin off or sell out its PC division, the Ministry of Economic Affairs (MOEA) is in a rush evaluating its influence on HP's commitment in Taiwan, including its local procurement and the plan of setting up Asia Computing Hub on the island.

An MOEA official noted that the spinoff of HP's PC division will produce an influence exceeding that of the sale by IBM of its PC division to Lenovo, due to the higher extent of outsourcing manufacturing by HP. The changeover of the ownership of HP's PC division, therefore, may cause local contract manufacturers to lose substantial amount of orders. “The worst scenario is the takeover of the HP PC division by Samsung,” said the official. Samsung may slash contract production orders for Taiwanese manufacturers, since it typically maintains an integrated vertical production, covering up- and downstream sectors.

Another major concern of government officials in charge is HP's plan, announced last year, to invest NT$3.6 billion in setting up an Asian Computing Hub in Taiwan, which involves expanding the manpower of its local R&D center to over 1,000 and making Taiwan a logistics center for terminal products, as well as boosting its procurement to US$30 billion (NT$950 billion) annually in the next three years.

HP's R&D center in Taiwan, said the officials, engages mainly in the product development, design, and logistics of personal computing for an extensive product lineup, including desktop PC, notebook PC, tablet PC, and cloud computing. HP is among multinationals with most active R&D activities and largest procurement amount in Taiwan, according to the official.