Taipei, Aug. 21 (CNA) In response to a PC spin-off plan announced by computer giant Hewlett-Packard (HP), the minister of economic affairs asked ministry officials earlier this week to evaluate the possible impact on the local market, Duh Tyzz-jiun, director-general of the ministry's Industrial Development Bureau (IDB), said Sunday.

Economics Minister Shih Yen-shiang expressed his concern after the HP announcement and instructed the bureau to compile an analysis of the possible impact on local PC makers and the contract manufacturing sector.

HP announced Aug.18 that it will discontinue its tablet computer and smartphone products and might sell or spin off its PC division to another company.

HP also plans to acquire the British software enterprise Autonomy to focus more on software and services, according to wire reports.

Ministry officials added that if HP's PC division were to be acquired by South Korea's Samsung Electronics Co., the impact on local contract manufacturers, who currently dominate the division, would be "unimaginable."

Samsung has been the major competitor of Taiwan's PC makers.

Duh said the bureau had invited institutional investors to analyze the possible impact and was expected to submit the evaluation report the following day at the earliest.

In addition to the report, the officials disclosed that the Ministry of Economic Affairs (MOEA) also plans to meet up with major contract manufacturers and local PC makers, including Asustek ComputerInc. and Acer Inc., to discuss the issue.

Aside from HP's major Taiwanese suppliers -- Quanta Computer Inc. and Inventec Corp. -- HP contributes 5 percent to 10 percent of the revenues for Hon Hai Precision Industry Co., Wistron Corp., CatcherTechnology Co. and various other local firms.

However, industry analysts have commented that local individual makers will see a decline in sales but not profits, because of the very low margins in PC contract manufacturing.

The MOEA officials added that after the introduction of iPads hit local mini-PC makers hard, HP's move is also a result of Apple's dominance in the field, especially the rise of its tablet computers.

(By Lin Shu-yuan and Jamie Wang)
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