Asustek hopes new ops center will speed PC production

With a planned operations center closer to its suppliers in China, Asustek hopes to speed PC production and cut costs

Asustek Computer will set up an operations center in southwest China by 2015 to manage manufacturing by contractors of up to 20 million Asustek notebook and tablet PCs a year, the company said on Friday. The move could streamline production and keep prices low for consumers in Europe, China and other parts of Asia.

Staff at the center will arrange local contracts and coordinate logistics to get PCs to markets around Europe and Asia, a spokesman for the Taiwanese company said.

The new center in Chongqing will put Asustek closer to contractors and suppliers that have congregated in the same region, and should help the Taiwanese manufacturer compete on cost and production speed, an analyst said.

"That location allows Asustek to be more flexible, more nimble, and keep the inventory of parts down," said David Wolf, CEO of Wolf Group Asia, a technology consultancy in Beijing. "They can do just-in-time orders whenever they're ready."

The firm will open its US$150 million center in the city of Chongqing, a manufacturing hub with relatively cheap land and a stable rather than migratory labor force.

Government officials have for years encouraged foreign firms to locate in western China to speed its development, offering in some cases breaks on taxes and land prices. Chongqing municipal leaders have spearheaded much of the technology growth of this city with a population of 31 million.

Asustek's expanded presence in China also will help it ship tablets quickly and cheaply to the huge, increasingly wealthy local market. The company expects to sell 1.5 million to 2 million tablets worldwide in 2011, controlling about 10 percent of the non-iPad tablet market, it said in February.

Asustek has also said that its production of netbooks, a market it pioneered in 2007 with the Eee PC 700, will remain unchanged this year as its tablet shipments grow to about 2 million.

Market research firm DisplaySearch estimates that 56 million tablets will be produced in 2011, up more than 200 percent over 2010 shipments. In China, iPads have been on shelves for about seven months.

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Ralph Jennings

IDG News Service
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