BenQ To Spin Off Brand, Keep Manufacturing

Taiwan's troubled BenQ surprised analysts by announcing it would spin off its brand, and keep its manufacturing business running under a new name: Jia Da.

Taiwan’s troubled BenQ has delivered a surprise: the company plans to spin off its BenQ brand as a technology design firm, while keeping its contract manufacturing business and operating under a new name: Jia Da Corporation.

According to BenQ president K.Y. Lee, the move is a common-sense division of the company. About 60 percent of BenQ’s revenue come from contract manufacturing for heavy hitters like Hewlett-Packard and Dell, so it’s logical to keep the manufacturing business as the core of the company, even if its operating under a new name. The BenQ brand will continue as a “fabless company with a strong integration of 3C [Computing, Communication, and Consumer] technology in the fields of product design, mobile communications, mechanical and materials engineering, and network convergence technologies.” The new Jia Da Corporation wil focus on the manufacture of 3C devices and technologies.

BenQ’s move is the reverse of what most industry watchers expected, although the change does bring the BenQ brand back around to being an Original Design Manufacturer (ODM) company. Opinion is divided as to whether BenQ can survive as an ODM: the business is notoriously competitive, and BenQ head K. Y. Lee once said he didn’t think it was a viable way for BenQ to survive. Once the spinoff is complete, Lee will be the head of both Jai Da and BenQ.

The move is the latest twist in BenQ’s recent struggles. In 2005, the company sought to become a major player in the handset market and bought Siemens Mobile; after pumping nearly a billion dollars into the business, BenQ finally gave up and, unable to find a buyer fo the business, has essentially been forced to sell its mobile operations for scrap. Shortly thereafter, three BenQ executives were arrested in Taiwan on allegations of insider stock trading.