Compal to Partner With LG Display in Notebook PC Parts

Compal Electronics Inc of Taiwan recently confirmed that it will set up a joint venture in China with South Korean flat panel display (FPD) maker LG Display Co (LGD).

Ray Chen, President of Compal, pointed out that the venture would focus on producing, assembling, and selling parts and components for notebook PCs, with details being evaluated.

Some local institutional investors said that the tie-up between Compal and LGD would ensure Compal to further secure panel supply, with LGD having extended sales channel.

According to Compal, the new venture will be capitalized at $15 million, in which Compal will invest $7.35 million to hold a 49 percent stake.

Chen said that Hon Hai of Taiwan, the world's leading EMS (electronics manufacturing services) provider, has been actively ramping up its notebook PC shipments, that has been forcing major contract notebook PC makers in Taiwan to accelerate vertical integration.

Institutional investors said the joint venture will help Compal to get assured panel supply at more flexible prices. Next year, they added, Compal is expected to ship more than 60 million notebook PCs. In addition, the sources also estimated that the tie-up might be related to Compal's business deployment in slate PCs. Compal has won contract order from Acer Inc. for such rapidly emerging portable device, so it needs more-stable supply of thin film transistor-liquid crystal display (TFT-LCD) panels.

The investors also pointed out that Compal has been trying to cooperate with strong partners so as to survive in the fierce competitions in contract-making business.

Source: CENS