Acer clinches suppy deal worth $1.2B with IBM, Hitachi

Taiwanese computer giant Acer Corp. has clinched a supply contract with top software makers International Business Machines (IBM) and Hitachi of Japan which will result in an additional $1.2 billion worth of exports coming from its manufacturing plant in Subic Freeport, Subic Bay Metropolitan Authority (SBMA) chairman Felicito Payumo announced yesterday.

"The (global) economic slowdown has actually been beneficial for Subic. Because of this, Acer has decided to transfer some of its production facilities to the Philippines, specifically to the Subic Freeport," Payumo said.

For last year alone, Acer’s Subic plant exported $973 million worth of computer and computer parts, up by more than 24 percent from last year’s $784 million.

Payumo, however, said that if the global economic slowdown continues, Subic will eventually be affected as demand for computer and other IT-related products will drastically drop.

Acer is the biggest investor in Subic, with a total investment of $120 million. It accounts for about 80 percent of total export earnings of the freeport since 1998.

Acer currently manufactures motherboard and add-on cards as well as notebook computer in its Subic plant.

The firm, with an annual production of 3.3 million motherboards and add-on cards, started its assembly operations in Subic in October 1995.

Acer had threatened to leave Subic in October 1999, at the height of the bilateral air dispute between the Philippines and Taiwan.

At that time, Acer claimed that it was losing between $200 million to $300 million in revenues from the cancellation of direct flights between the Philippines and Taiwan.

With its decision to expand its manufacturing operations in the country, government sources said Acer is showing confidence in the local economy despite a spate of economic and political woes.