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By | Tony Smith 11th April 2006 09:54

BenQ sells optical drive biz to Liteon IT

Deal creates world's second largest CD, DVD drive maker

BenQ is to sell its optical drive operation to fellow Taiwanese manufacturer LiteOn IT. This gets it closer to shedding the last of its component businesses and focus entirely on end-user products, including phones, notebooks and consumer electronics equipment.

The deal sees BenQ take a 13 per cent stake in LiteOn after a new-share issue and receive TWD1.2bn ($37m) in cash. In total, the sale values BenQ's optical drive business at around $200m.

LiteOn is Taiwan's largest optical drive maker, and currently the third largest globally, behind Hitachi-LG and Toshiba-Samsung. According to market statistics from Japan's Techno Systems Research, the BenQ deal will put LiteOn in second place, with a market share of 26-27 per cent, compared to Hitachi-LG's 28 per cent share.

BenQ's announcement comes less than two months after Sony and NEC said they too will merge their respective optical drive operations into a single entity, Sony NEC Optiarc, which opened for business last week.

Earlier this week, Taiwan's biggest flat-panel display maker, AU Optronics, said it was buying smaller rival Quanta Display. BenQ may itself be pondering the sale of its own LCD production division. ®

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