Hit by U.S.-China trade dispute, Taiwan laptop maker Inventec to invest $10.3 mil in Malaysia

17, Dec. 2019

Photo by Aleksander Vlad on Unsplash
Photo by Aleksander Vlad on Unsplash
TAIPEI, NNA – Contract computer maker Inventec Corp. plans to invest 40 million ringgit ($9.65 million) to expand “intelligent” device production capacity in Malaysia, the company said last Thursday, the latest sign of a rebound from struggles linked to the U.S.-China trade dispute.

The manufacturer will acquire a 20,498-square-meter lot with buildings measuring 12,986 square meters from Leader Properties Sdn. Bhd. through its subsidiary Inventec Appliances (Malaysia) Sdn. Bhd. The lease will be effective for 60 years.

“This move is in response to our clients’ demands,” an Inventec spokeswoman told NNA Monday. Production on the new lot is expected to begin in the second half of 2020, she said.

Inventec is retrenching because of the lingering U.S.-China trade dispute that began in 2018. Its major clients, such as U.S.-based brands Dell and HP, would pay more now to place orders from Inventec’s China factories as Washington keeps adding tariffs against Chinese goods.

The market for Inventec’s major products – laptop computers, servers and “intelligent” devices -- is forecast to keep growing, Taiwan media reports quote General Manager Maurice Wu saying on Thursday. Wu pointed to a rebound in demand from data centers under cloud service providers and forecast server sector growth of at least 5 percent in 2020.

Slumping server sales during the U.S.-China trade dispute brought a net profit of $4.12 billion New Taiwan dollars ($137 million) from January to September this year, an 18.8 percent decline over the same period of 2018, Inventec’s financial report showed.

In another sign of a comeback, Inventec applied in October this year to invest NT$4.8 billion in expanding existing plants in northern Taiwan for capacity to make servers and laptop PCs that it once produced in China, the Taiwan government’s InvesTaiwan Service Center said in an Oct. 24 press release.

The company, founded in 1975, has other operations in Europe and North America. Revenue reached NT$506.8 billion in 2018.

Notebook shipment may still struggle because of an ongoing shortage of Intel chips likely to last into the first half of next year, according to Taiwanese media reports.

Pending and completed orders for laptop PCs have shown a 5 percent gap in the current quarter so far, the spokeswoman said.