Asustek, Advantech Announce Strategic Alliance

Taipei, Oct. 4, 2005 (CENS)--Asustek Computer Inc. and Advantech Co. recently announced that they would form a strategic alliance through a share swap arrangement.

Asustek and Advantech will collaborate on new product development, manufacturing, and quality control, and set up a joint venture, tentatively named AdvanSus, to pursue new business opportunities in the industrial computing arena. Asustek and Advantech are global leaders in commercial computing and industrial computing, respectively. The strategic alliance is expected to impact both companies' long-term development.

Under the strategic alliance agreement, Asustek will hold 15% of Advantech's shares and a seat on Advantech's board of directors, in addition to taking on a supervisory role within Advantech. Asustek will issue new shares in exchange for 10% of Advantech's shares. For the remaining 5%, Advantech will direct specific shareholders to make a share exchange with Asustek. On the other side, Advantech will hold about 1.4% of Asustek's shares.

The swap ratio is set at 1.13 shares of Advantech for one share of Asustek. The ratio is mainly derived from both companies' recent stock prices, with reference to other key performance indicators such as net worth per share, earnings per share, and future business potentials.

Asustek and Advantech will contribute dedicated talents and resources to the new joint venture, which will enter high-potential markets such as design and manufacturing service (D&MS) for industrial computing, industrial mobile electronic devices, industrial motherboards, and industrial server segments. The joint venture is expected to become operational in mid-2006.

A global leader in the industrial computer industry, Advantech is dedicated to long-term brand building, and to providing customized platform design and development to customers. The company assists system integrators by providing multiple value-added solutions and services to meet customer needs in different areas.

The company offers over 500 products and solutions, including motion control, measurement, communication, applied computing, and embedded computing devices, as well as industrial motherboards and peripherals. Advantech's current market value is about US$1 billion, with estimated worldwide consolidated revenues reaching over US$400 million. It now has more than 2,000 employees and maintains operations in 35 cities of 16 nations.

A global leader in motherboards, graphics cards and notebook computers, Asustek won more than 1,171 prizes last year and has been listed in BusinessWeek's "InfoTech 100" for seven consecutive years. The company has a current market value of around US$7.7 billion and 50,000 employees worldwide.

Jonney Shih, CEO of Asustek, stated that Advantech, under the leadership of K.C. Liu, is a respected player in industrial computing that has created a high brand value and outstanding business results. With the strategic alliance with Advantech, Asustek expects to further create synergy in industrial computing.