Asus Follows in Acer's Footsteps, Spins Off its Manufacturing Business

Paul Lilly

According to reports, Asus is in the process or branching off its contract manufacturing wing and will create a new company Pegatron Investment Holdings Company. As part of the split, Asus will issue a bunch of shares, 75 percent of which will go to the company's shareholders, and 25 percent to be held by Asus.

It's not clear whether or not Pegatron will also offer its manufacturing services to other Taiwanese companies or if it will exclusively supply parts to Asus. But either way, Asus is expected to put a ton of effort into promoting its own brand identity. The other major benefit is that Asus will drop its own capitalization by up to 85 percent.

While AMD's split into separate design and manufacturing businesses comes to mind, this move is more in line with what Acer did back in 2001 when it f ormed an independent company called Wistron to handle its manufacturing division. The move proved crucial in expanding Acer's global presence, and the company now rivals Dell as the top OEM in the world.

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