DailyTech - Asustek to Split Company in January

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Hardware Asustek to Split Company in January
Tuan Nguyen (Blog) - July 3, 2007 1:33 PM

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18 comment(s) - last by SandmanWN.. on Jul 5 at 2:47 PM

ASUS CEO, Jonney Shih (middle), formally announced the company plans early this morning. (Source: HKPEC, John Lam)

ASUS to spin off OEM manufacturing and branding business units

This week IT conglomerate Asustek announced that the company will split into two independent entities. Prior to this week's official announcement, Asustek already dropped hints on the split but did not previously announce a date.

Asustek will separate into three different entities. The first split will separate Asustek's branded business from its manufacturing operations. The move will allow Asustek's branded business to focus on developing business and looking into new markets without the worry of manufacturing on its back.

Analysts agree that the move is one that everyone can look forward to. "It should be positive to the company," said Jerry Chang, product development manager at National Investment Trust, Taiwan.

After the initial split, Asustek's manufacturing operation will be split into two companies: Pegatron and Unihan. According to Asustek, Pegatron will focus on PC related products while Unihan will be taking care of non-PC related products. At a later date when the two manufacturing operations have stabilized, Asustek plans to lower its stake in both companies. Since Pegatron and Unihan will be located in China, Asustek is only allowed a maximum of 40-percent of its net value to be put into its China operations.

The split is planned for January 2008 said Asustek CEO Jonney Shih in a press conference this morning.

In late March, Asustek and Gigabyte announced that they would dissolve their partnership. Called Gigabyte United, the operation between the two companies shared manufacturing resources and sold products under the Gigabyte United brand name. Gigabyte officials said that after much consideration, the partnership did not appear to be beneficial to the company.

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Two of the newest Transformers

By HercDriver on 7/3/2007 2:13:10 PM , Rating: 5

Yes, its Pegatron and Unihan. the former a Decepticon, and the latter an Autobot. It will be great to see them do battle!
Seriously, though...couldn't they find better names?!

RE: Two of the newest Transformers

By glenn8 on 7/3/2007 2:19:43 PM , Rating: 1

haha.. I was thinking exactly the same thing. :)

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RE: Two of the newest Transformers

By Screwballl on 7/3/2007 2:31:02 PM , Rating: 3

ditto! Stupid names... or I wonder if the translation to engrish was botched???

just in time for the Transformers movie...

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RE: Two of the newest Transformers

By KristopherKubicki

(blog) on 7/3/2007 2:34:04 PM , Rating: 2

What better way to co-op advertise than to rename your company in conjunction with a half-billion dollar movie. :)

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RE: Two of the newest Transformers

By ninjit on 7/3/2007 3:35:32 PM , Rating: 2

I think transformers only cost 150 mil to make.

A supposed "steal" in terms of Hollywood movie production costs.

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RE: Two of the newest Transformers

By HaZaRd2K6 on 7/3/07, Rating: 0

RE: Two of the newest Transformers

By AmberClad on 7/5/2007 8:24:36 AM , Rating: 2

Compared to other Asian hardware company names like DFI (Diamond Flower Inc.), Super Flower, LG (Lucky Goldstar), G. Skill (Great Skill), and Zippy, I honestly don't think the new ASUS names are all that bad.

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Pegatron Motherboard ?

By 13Gigatons on 7/3/2007 6:12:27 PM , Rating: 2

Will we still buy Asus motherboards or Pegatron motherboards ?

I've never understood what the problem with Asus was or for that matter Gigabyte...seriously just buy a company and market the product.

RE: Pegatron Motherboard ?

By staypuff69 on 7/5/2007 5:34:32 AM , Rating: 2

you do realize don't you that all the ram modules that are half decent are produced by only two companies right??? so your incredible Corsair Ram is either by Samsung or Micron.... and vice versa for all other Ram companies.....

oh and same for lcd screens.....

they are simply specializing each company... for years people howled at all the companies joining into multinational conglomerates..... now you all are yelling for this to not happen in reverse.....

believe me when i say this..... it's good for the products.... and good for the consumer.....

if all these companies where to do this you'd have tons of good products available to everyone .... and not just a select few...... imagine all the great things you love about asus boards being available to all mb manufacturers..... neat huh?????

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3 companies?

By retrospooty on 7/3/2007 9:36:35 PM , Rating: 2

I wonder which one inherits the wonderful support department? =)

RE: 3 companies?

By SandmanWN on 7/5/2007 2:47:04 PM , Rating: 2

India of course... :P

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oh well

By FXi on 7/4/2007 8:40:48 AM , Rating: 2

While I don't love the name either much, more am I seriously thinking "here goes Asus quality down the drain" or what remains of it. The reason you split a manufacturing operation is to make it competitive, but that competitive type of outsourcing is almost never done to increase quality. Instead it lowers price and tends to move quality to "average" which is normally management acceptable for the savings in cost. One of the big claims for any in house manufacturing is the fact that it keeps quality higher because the entire company pays when quality is not kept up.

Secondly the reasons for doing this often focus around a differentiation in management about what direction to take the company. When those directions can't be amicably resolved internal to a company, the company often goes its separate directions. That focus again, clearly is away from current products, and speaks again, of turning current products to commodities or "sidelines" as one focuses on "the new stuff" whatever that happens to be for each portion of the new companies.

All these things point to a drastic change in the quality and capability of the current product lineups, having seen quite a few of these splits over time. Hopefully I'm wrong, but it'd be good to start thinking about what quality items would make good substitutes if I'm right.

RE: oh well

By pr5ss on 7/4/2007 3:53:58 PM , Rating: 2

I hardly see Asustek mobos as a sideline item. This split will focus the company's strengths in both depts. Items like cell phones, PDA's, and PND's as well as new items we haven't heard about yet will be better developed by a specialized team .While their staple products ie: mobos, graphics cards, etc. will get the focus and attention that has won them awards year after year. I expect the product to stay strong or get better...I cant say the same for tech support or faulty piece parts. These boards come together with the help of many companies.There is so much room for error. Intel,AMD,VIA,Phoenix, Amibios,Nvidia,Award,ATI the list goes on...

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Pegatron?

By kuyaglen on 7/3/2007 2:47:36 PM , Rating: 2

So a future mobo will be the Pegatron Crosshair ROG?

All very interesting but....

By PaxtonFettel on 7/3/2007 8:00:34 PM , Rating: 2

What exactly does it mean for us, the people who are buying their stuff? That's what we really want to know.

Does this mean they will now have rma REPLACEMENTS?

By Comdrpopnfresh on 7/3/2007 10:43:24 PM , Rating: 2

The bios chip went bad on my a8n32-sli deluxe. I had kept it clean and lapped the bases of the heatpipe, and fine-tuned it like a sports car. They refused to send me a bios chip, and throughout the process assured me I would either receive my board or a new retail one. I got a refurbished one with dust still in the heatsinks, a sticky spot on the underside, capacitors bent, and a crooked heatsink that doesn't make proper contact. When I called the RMA department, they said I could send it in and have another in 10 days.....

Only company name, not brandname.

By jpcesar on 7/4/2007 7:38:34 AM , Rating: 2

Guys, the brandname ASUS will carry on. Only the Company name ASUSTeK Computer Inc will change due to splitting. Only OEM part of asustek business will migrate to another company name. This will distinguish them better from things like ASRock (asus oem).

Maybe not a smart move

By Black Rainbow on 7/4/2007 5:11:32 AM , Rating: 1

I don't know guys, but are they really just throwing away the ASUS name or are Pegatron and Unihan code names within the company? I hope so for their sake, because discarding the ASUS name would be a very bad move, since it may not be immediately clear to consumers that Pegatron mobo's are actually ASUS mobo's. This might cause them to buy a different brand of mobo (I'm just using mobo's as an example here, it could be anything else too), and I can't see how this would be a good thing for ASUS...