ASUS is expected to expand its production capacity in Suzhou, China, Mexico, and the Czech Republic and has begun searching for new bases in the Greater Shanghai area to setup a manufacturing headquarters.

 

Production capacity at ASUS's Suzhou plant at present is being overhauled; ASUS is expected to add three more factories by the end of 2004, with investment estimated to be over NT$800 million.

 

Furthermore, the Suzhou plant also has production line for printers. With ASUS investing through partnership with international vendors to move into the printer market, ASUS was awarded Dell's printer orders. ASUS also will seek to strengthen its PC systems business through large vendor orders; ASUS was recently awarded HP's barebone orders.

 

Recently, ECS fully acquired the Shenzhen Xinmao factory, purchasing the remaining 49% of the factory for US$1.9 billion. Due to the investment cap and complications encountered with the approval procedures of Taiwan's Investment Commission, ECS had to complete the purchase in two separate stages.

 

ECS believes that with the purchase of the Xinmao factory, it can help the company to obtain more orders. At present, ECS's OEM/ODM business share is approximately 20% to 30% with HP, Acer, and Legend as its main customers.

 

Production at the Xinmao factory is anticipated to reach over 2.2 million motherboards monthly. Meanwhile, monthly production at ECS's Jing Mao factory is estimated to reach 2.5 million units.

 

ECS is anticipated to integrate resources such as machinery and LCM (Liquid Crystal Module) production with its largest shareholder, Pou Chen. ECS is using Pouchen's machinery for its notebook PC production and is eyeing production of LCD TV and monitor in the future.

 

Furthermore, USI announced its intention to invest US$1.2 billion toward its third production base at Kunshan, China. Production at the new plant will include motherboards and wireless communication equipment. USI at present is assigning the Shenzhen plant as its main motherboard production base and its Shanghai plant will be used to flexibly adjust production to meet customer needs.