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To manage the former ECS plant, Asustek creates a new company, Asusalpha Computer

Asustek Computer
announced plans to invest 3.5 billion. Taiwanese dollars (slightly more
1 billion. USD) in the construction of a subsidiary, Asusalpha Computer,
which will operate the newly acquired production plant from ECS
laptops. Despite the fact that ASUS will be the sovereign owner of the new company,
the latter in its operations will be independent of the parent company, and the profit
Asusalpha will not count towards Asustek’s earnings.

When calculating the total profits of Asustek, completed orders received are also taken into account
through the Taiwanese representative office of the company and the Chinese holding. Vice President
Asustek, T.X. Tang (T.H. Tung), answering the question of whether the subsidiary will
receive orders on their own, replied that Asustek is still evaluating various
business models.

As for the ASUS decision itself to create an independent subsidiary
for the acquired plant, some observers consider reasons for
this is, firstly, separate management and financing systems, which
the plant is guided by contract manufacturing for Apple Computer – a sort of
OEM-oriented model, which is different from our own production
Asustek models in Taiwanese factories and, secondly, the low margin that can
get from the operation of the Changli plant.

The margin for Apple products is estimated at just $ 4-5. If acquired
the plant was organizationally included in the group and continued to focus
in OEM production, then its business would seriously lag behind the Asustek business.

Asustek will pay about 680 million for the plant. Taiwanese dollars (about 19.6 million.
USD), for equipment – 300 million. Taiwanese dollars (about 8.6 million.
US dollars). Assets will be transferred by June 30.

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