Aaron Lee, Taipei; Joseph Tsai

 

Commenting on revelations that Acer's major ODM partner Compal Electronics will establish a joint venture with Lenovo for manufacturing PC products, Acer vice president Scott Lin has said that Compal is not the only one able to double cross, implying that Acer's orders to Compal may be affected.

Lenovo, on September 27, announced it will invest US$100 million initially, followed later by another US$200 million, to establish a joint venture with Compal. Lenovo will hold a 51% stake in the joint venture and Compal 49%. Compal also pointed out that the new joint venture will mainly manufacture notebook and all-in-one PC products with mass production scheduled for the end of 2012. Monthly notebook capacity is expected to reach 300,000-500,000 units initially.

Acer is currently still the largest client of Compal with close to 60% of its notebook orders in 2011 outsourced to Compal. But as Compal has decided to set up a joint venture with Lenovo, a major competitor of Acer, Acer's response to the announcement is a major concern among market watchers.

As for the two firms' cooperation, Lin pointed out that Acer is not concerned, and noted that since Lenovo is a brand vendor and Compal is an ODM, the two firms' completely different operating strategies and philosophies will likely mean that it will take some time for the two to reach a consensus.

Through the cooperation, sources from PC players believe Lenovo is aiming to acquire more experience in notebook R&D and manufacturing to ensure the company has a flexible production plan, while Compal will be able to tighten its relationship with Lenovo and maintain its notebook orders in the future.