Quanta seeks new ventures and devices

Taipei: Quanta Computer, the world's second-largest maker of notebook computers by shipments, plans to make more strategic investments this year and expand into iPhone-style handheld devices following record profit last year, Chairman Barry Lam said.

"We are looking for joint ventures with some companies that are already successful in the market — if they need some financial investment — as a strategic partner," Lam, 60, founder of the Taoyuan, Taiwan-based company, said on Monday in Taipei. He declined to name targets.

Quanta, which supplies Apple and Hewlett-Packard, dropped to second place by shipments last year after Taipei-based rival Compal Electronics Inc. sold more low-cost notebooks amid the global recession. Shipments this year will surpass an earlier forecast for 40 per cent growth after customer feedback at the Consumer Electronics Shows in Las Vegas this month showed demand is very strong, Lam said.

The company isn't in talks for mergers or ventures with Hon Hai Precision Industry, Lam said. Hon Hai, based in Taipei, plans to buy Quanta's laptop unit, the United Evening News reported on December 7, without saying where it got the information.

"I don't want to talk to Hon Hai for 10 years," Lam said. "I am still making notebooks, I am still in manufacturing, I don't need them."

Hon Hai, the world's largest contract electronics manufacturer, makes Apple's iPhones and iPods and has moved into producing notebook computers on contract as well as its own Foxconn brand.

"Quanta needs to prepare for competition from Hon Hai, so they have to make strategic investments," said Calvin Huang, who rates Quanta "buy" at Daiwa Securities Group in Taipei. "Eventually they will want to compete on cost."

35.9 million laptops

Quanta shipped 35.9 million laptops last year while Compal sold 37.9 million units, according to data from both companies. Quanta gets about 75 per cent of its revenue from notebook sales. Its shares climbed 103 per cent last year on the Taiwan Stock Exchange, trailing a 158 percent gain for its bigger rival.

"We made a very good profit, a record high profit last year," Lam said, declining to provide details because the data hasn't been released. "I look forward to another good year for notebooks."

Quanta, which must report 2009 earnings before April 30, is expected to post a 6.4 per cent rise in net income for the year to a record $21.5 billion Taiwan dollar ($677 million), according to the median of 26 analyst estimates compiled by Bloomberg.