* Inventec in talks to build plant aiming to make HP laptops
* Factory's capacity will be more than 4 mln laptops per year
* Analysts concerned over Inventec expansion
* Shares up 0.4 percent, lagging main board
(Adds details, analyst comments, background)
By Kelvin Soh and Roger Tung
TAIPEI, March 16 Taiwan contract laptop PC maker
Inventec (2356.TW) is in talks to build a plant in western China
aiming to supply global PC leader Hewlett-Packard (HPQ.N),
officials said on Monday.
The factory in the western Chinese city of Chongqing will
have capacity to produce more than 4 million laptop PCs every
year, said the official at the Xiyong Micro-electronic Park, who
would only give his surname as Wang.
He added that talks were in late stages, and land had already
been set aside for the project. "If they start construction of
the factory by the first half of this year, they can start
production by the second half," he said.
An official at Inventec, the world's fourth-largest laptop PC
maker, had no comment, while an HP spokeswoman was not
HP has held talks with Inventec on a manufacturing tie-up at
the Chongqing facility, but has not reached any specific deal
yet, said an official in HP's logistics department, speaking on
condition his name not be used because he was not authorised to
speak for the company.
Inventec's move comes after HP announced in October it would
set up a production base in Chongqing to begin operations in
Contract manufacturers and other suppliers frequently set up
manufacaturing facilities in areas where their clients already
have large operations, streamlining logistics and supply chain
Many top PC brands such as HP, Dell DELL.O and Acer
(2353.TW) typically carry out their own design work, but
outsource the labour-intensive manufacturing to original
equipment manufacturers (OEMs) such as Inventec.
Many of these OEMs are headquartered in Taiwan, with
Taiwanese contract manufacturers such as Quanta (2382.TW) and
Compal Electronics (2324.TW) making more than 80 percent of the
world's laptop PCs.
Some analysts expressed concern about Inventec's move to set
up the factory, saying that any expansion plans at this point
might not be a good thing for the company.
"Looking at their factory in Pudong (Shanghai), they're still
having problems there and so I'd be a little concerned about how
things go with them in Chongqing," said KGI Securities analyst
Inventec shares were up 0.4 percent at T$12.65 by 0355 GMT,
lagging the benchmark TAIEX's .TWII 1.63 percent advance.
(Editing by Jacqueline Wong)