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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