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Quanta Computer has sent a five-member investigation team to study whether to set up its first assembling base in the western city or not, disclosed people familiar with the matter on October 19, describing the move as part of the Taiwan-based notebook giant's response to the low-cost strategy initiated by Foxconn.
"Competition between the two Taiwanese companies started after Foxconn announced its decision to make a foray in the laptop assembling market," said an industry insiders, "and the aggressive moves by its new rival in Chongqing is getting on nerves of Quanta Computer."
The notebook maker expects to familiarize the investment conditions and environment in the western Chinese city. To be studied by the five-member team will include costs on labor force costs, land, water, electricity, and taxation, according to a source.
Additionally, the company is about to find out the preferential polices granted to Foxconn in the city, noted another source, adding that the question of how many preferential measures Quanta Computer will get access to will be the key factor for a plant construction in the city.
"As the No. One notebook maker in the world, Quanta Computer hopes to get the same support or even more from the local government," said the industry insider.
Quanta Computer has to expand its presence to the inner cities in Mainland China to court for more orders after the global economy shows signs of recovery from the recession, as the company finds it difficult to expand the production capacity of the plant in Shanghai, its only production base in the mainland.
A flock of Taiwanese electronics makers are expected to shift their focus to the mainland in the future in a bid to make use of the supportive policies and various resources there, predicted a market observer.
The municipal government of Chongqing is poised to enlarge its laptop production capacity to 40 million to 50 million units a year, as part of an ongoing plan to stimulate economy, said Huang Qifan, deputy mayor of the city, noting that resource costs in Chongqing stand 60% to 70% lower compared with those in costal cities.
(USD 1 = CNY 6.83)
Source: www.163.com (October 19, 2009)
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