Asustek Computer is continuing to insist that 30 per cent of its notebook production will be outsourced during the second quarter of 2009.

However, company sources report that the firm may not meet its goal until the second half of 2009.

Asustek has already placed a monthly order for 40,000-50,000 X series notebooks to Foxconn Electronics (Hon Hai Precision Industry) and expects to outsource 30 per cent of its EEE PC orders. 

Foxconn has apparently inaugurated a new production line in its Kunshan, China to process Asustek's order. Nevertheless, the recent move has generated concerns over the company's alleged lack of notebook manufacturing experience. It should also be noted that the troubled Foxconn plans to eliminate 1,500 jobs in Hungary and reduce its China workforce by five per cent, or 30,000-40,000 individuals. In addition, share prices of Foxconn have plunged nearly 85 per cent this year.

Asustek, which is also feeling the effects of a global economic slowdown, expects to record a 10-20 per cent decline in profits for 2008. The corporation is projected to generate profits of NT$22-24.7 billion ($657-737.5 million) for the year, down sharply from NT$27.5 billion in 2007. Analysts have attributed the rather sizeable decrease to an excess in inventory and a series of missed projections.

In addition, Asustek has revised its overly-optimistic notebook shipment estimates, but continues to insist that its netbook distribution goal will remain on track at five million units. Indeed, the firm reportedly shipped an impressive 4.2 million notebooks during the first three quarters of 2008. Buoyed by successful sales, CEO Jerry Shen famously predicted that Asus would sell 1.9 million units during the fourth quarter. Yet, only 620,000 notebooks were shipped in October, 550,000 in November and 300,000 in December - a total of 1.47 million units.

Meanwhile, Asustek subsidary Pegatron Technology has been forced to lay off 50 per cent of its workforce. The firm is expected to slash jobs at its Suzhou and Shanghai plants by the end of 200, leaving a total of 45,000 employees. X

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