A week in tech

Taiwan

Hardware
• Industry observers note that the first part of what is seen as the consolidation process in Taiwan's competitive LCD industry has begun, a development that was seen earlier as mere speculation. AU Optronics, the world's third-biggest maker of TFT liquid crystal displays, announced earlier this month its plan to acquire Quanta Display, a local rival, in a deal valued at about US$2 billion in stock. It has been rumored that Quanta Display was in talks with Taiwan’s third-biggest flat-panel supplier Chunghwa Picture Tubes. Once completed, the deal will make Quanta, with about 6 percent of AU Optronics, the second-biggest shareholder after BenQ, a holder of a 9-percent share. Most analysts stated that the agreement is expected to bring about synergies because AU Optronics and Quanta Display have little overlap among their customers. Through the merger, AU Optronics is predicted to become a supplier for flat-screen TV’s, which is to be set up reportedly by Quanta and Sanyo. Despite overtaking South Korea as the world's largest manufacturer of LCD panel, Taiwan’s industry has always been exposed to sudden price drops given the fragmentation of the industry. This is the scenario that observers say will be changed by the deal AU Optronics is considering. Chi Chi Mei Optoelectronics is also described now as under pressure to find a takeover target. Whether by Chi Mei or AU Optronics, two firms that are seen as targets for takeover are Hannstar Display and Chunghwa Picture Tubes.

• Quanta Computer, the world's largest notebook manufacturer, said it had won a contract to make up to 15 million notebooks, starting at the end of the year. The contract, however, is for laptops dubbed the $100 laptop. Even if the size of the order is the equivalent of almost a third of the number of laptops shipped worldwide last year, observers are noting that it may not be a cause for celebration given the low price that characterizes such products. These low-end machines are part of One Laptop Per Child (OLPC), a United States non-profit organisation launched by the Media Lab at the Massachusetts Institute of Technology. The idea is to provide low-cost laptops for children and students in developing countries. The contract should give Quanta plenty of work, but whether the order will significantly boost profits is the big question. According to Nomura Securities, Quanta posted for 2005 revenue of NT$403 billion ($12.4 billion) with earnings of NT$10.9 billion ($337.4 million), a net profit margin of just 2.7 percent down from 3.7 percent in 2004. The small profit has been attributed to the fact that Quanta makes machines for brands like Hewlett-Packard and Dell, firms known for cost-cutting measures. The project will use a microprocessor from Advanced Micro Devices (AMD), rather than from Intel.


Singapore/Malaysia/Philippines/Indonesia

Internet
• Mitsui & Co. revealed its plans to acquire an 11-percent stake in PT Agranet Multicitra Siberkom (Agrakom) one of Indonesia's leading internet portal operators and cellular phone content providers. Agrakom already delivers news to cell phones, as well as images, ringer melodies and games developed by other firms. Mitsui intends to supply Agrakom with content-delivery software. Under the acquisition plan, the Japanese company said it will make an investment of about 87 million yen ($746,000) in Agrakom. Mitsui forecasts the popularity of cell phones and related services to spread rapidly in Indonesia.

storage