Quanta to Start Mass Production of Industrial PCs in China in Q3

Taipei, March 24, 2008 (CENS)--The Taiwan-based Quanta Computer Inc., the world's largest contract supplier of notebook PCs, has stepped up its business deployment in production of industrial PCs, scheduled to mass produce the products at its Songjiang plant in China in the third quarter of this year, according to company sources.

To expand its business operations to include production of industrial PCs, Quanta, under direction of its chairman Barry Lam and president C.C. Liang, is reportedly to acquire a 15-17% stake in Kontron Asia Inc., a subsidiary of Kontron AG, which will gradually place orders with Quanta starting from the second quarter this year.

Working on industrial computers with Kontron is expected to infuse momentum into Quanta's sales performance and help maintain its gross profit rates at a level of between 40% and 50% this year, as industrial PCs generally generate a 30% gross profit rate on average, according to institutional investors.

At the moment, sales of notebook PCs contribute over 85% to Quanta's total sales a year; however, increasing maturity of the notebook PC market has made it difficult for the firm to maintain high gross profits merely in the field. Thus, in addition to ramping up production of notebook PCs, the firm has also added other products to its product portfolio in recent years.

Quanta, in fact, has paved the way for venturing into industrial PCs since last year by actively employing engineers for such.

On the other hand, Kontron is Germany's foremost industrial PC maker, providing a spectrum of integrated solutions, including development of computer platforms, embedded systems, motherboards of embedded PCs, human-machine interfaces and rugged notebook PCs, for use in communication, automation, transportation and aviation.

Kontron scored aggregated revenue of 322.6 million euro for the first three quarters of last year, successfully unseating its counterpart Advantech Co., Ltd. as the world's No. 1 supplier in the line. The firm now controls a 66% stake in Kontron Asia and the figure will fall under 50% after Kontron shifts part of the stake to Quanta in the future.