03.16.2001
Moving into pole position in the China market

• First-tier NB PC maker Arima Computer's (2381 'Hua Yu') first China-based plant will start operation next month. Quanta (2382 'Guang Da') began motherboard production in China on March 1.

• Arima's plant will initially turn out motherboards for shipment to Arima's US plant for NB PC assembly. We think the new plant will not affect results this year. The company will continue to increase China investment in 2001, and has plans to construct seven more plants there.

• Arima is currently testing NB PC assembly in China, collecting manufacturing cost information and making preparations for full NB PC production there once the Taiwan government lifts restrictions.

• Compal (2324 'Ren Bao') and Inventec (2356 'Ying Ye Da') have already set up capacity on NB PC production in China and are awaiting the Taiwan government's go ahead.

• Lower production costs and potentially huge NB PC demand growth in China are major attractions for local NB PC makers. China's NB PC market is expected to grow to 700k in 2001 from 300k last year. We believe China-based production facilities will help Taiwan's NB PC makers gain more OEM/ODM orders from international clients.

MarthaChen@Primasia.com +886-[0]2-2547-8878