Friday, December 27, 2002
Hon Hai Precision Industry has clinched a NT$17 billion order for 2 million computers from Dell Computer.
The bare-bones system, which does not include a monitor, is likely to be the OptiPlex SX260, a slim desktop computer aimed at corporate users.
Jonathan Chen , an analyst at SinoPac Securities Corp , said that Hon Hai will wholesale the model to Dell for about US$250 each.
The new order may increase Dell's purchases from Hon Hai by 50 percent.
The company has recently proven a top choice amongst major manufacturers.
"Based on its high economy of scale, Hon Hai kept winning orders from Hewlett-Packard, Apple Computer and Dell in the second half of 2002," Jung said.
"We estimate that Hon Hai's sales from the PC business could grow by 15 percent in 2003, with the main contribution from increasing orders for system assembly and motherboard manufacturing," he said.
With a recovery in the computer market still uncertain, slim models that can retail for around US$500 including a display screen should find favor in the corporate sector.
The last major round of corporate spending was in 1999 prior to the switch to year 2000, and Jung said many vendors are pinning their hopes next year on a new round of buying to replace older models that are now approaching the end of their life cycle.
If the expansion in system manufacturing from this order is added to Hon Hai Precision's growth in other product areas -- such as communications devices -- the company is heading for a rosy 2003, the analysts said.
"Next year Hon Hai will see around 30 percent growth overall," Chen said.
"Right now Hon Hai is aiming globally to be an electronics manufacturing service [EMS] provider," said Chen. "This order is part of that process."
Dell remained tight-lipped about the details of any orders for next year yesterday.
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By: DocMemory
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