Cheng Uei Reportedly Ventures Into NB PC Clones in China

Taipei, March 31, 2009 (CES)--Eyeing the great business potential shown in the popularity of netbook and notebook PC clones in China, Cheng Uei Precision Industry Co., Ltd., a connector maker affiliated with Hon Hai Group, is reportedly going to venture into the market by setting up a joint venture with local companies, according to industry sources.

With Cheng Uei controlling a 50% stake, the joint venture is to specialize in production of branded netbook PCs and notebook PC clones, seen as Hon Hai Group's step into China's up-and-coming notebook PC clone market.

With the joint venture, Cheng Uei, which has tried to diversify its business operation into notebook PC assembly, has reportedly won an order for notebook PC clones from a generic brand founded by several large-sized PC distributors in southeastern China. Also, Cheng Uei is expected to land contract orders for netbook PCs from Lenovo and Beijing Founder Electronics Co., Ltd.

With strong ability to produce housings, connectors, thermal dissipation modules, camera modules, batteries and hinges in house, Cheng Uei can effectively lower the unit price of netbook PCs to only RMB1,550 (US$US$221 at US$1: RMB7), far lower than the RMB3,000 (US$428.6) average and quite competitive in the market. Plus, venturing into production of netbook PCs and notebook PC clones can also help to boost shipments of PC parts, very beneficial to Cheng Uei.

In the meantime, industry insiders indicated, the colossal success of notebook PC clones in China has been increasingly attractive to local companies in related industries, with some of them showing intense interest in cooperation with Taiwanese OEMs (original equipment manufacturers) to jointly explore the huge business opportunities.

Noteworthy is that more and more notebook PC clones supplied by Chinese copycats are labeled with Foxconn, affiliated with Hon Hai Group, which has been alleged to quietly produce the related products for Chinese clients. However, the group has fiercely denied allegation and considered suing these copycats for trademark infringement.