TAIWANESE CONSUMER ELECTRONICS manufacturer, Lite-On Technology has said that it will flog its Digital Display sector to ODM laptop manufacturer Wistron for the equivalent of about US $302 million. The deal is set to go through by Q3 of 2008.

Lite-On said that it would be selling off all inventory, machinery and IP belonging to its Digital Display unit, but that Wistron would be building its own structures to house the equipment in. In the meanwhile, Lite-On will lease its infrastructure to Wistron while it builds the new factories, which should be ready in about two years time. Wistron specialises in system assembly.

By investing US $40 million in Wistron, Lite-On is effectively taking part in a private placement at Wistron, meaning that Wistron will be funding part of the Digital Display deal in shares.

Wistron is the lesser competitor to Taiwan's top two contract laptop PC makers, Quanta Computer and Compal Electronics Wistron hopes that the deal will allow it to beef up its LCD screen product line, and therefore grab more market share, seeing as Lite-On’s Digital Display unit managed to pull in about US $2.7 billion in revenues for 2007.

In 2007, Wistron managed to ship off between 700,000 and a million LCD televisions, but the company now hopes that it will be able to double this number for 2008. Lite-On shipped between 8-9 million display units in 2007, so the target is not an unrealistic one. The investors also seem to have faith in the move with Wistron shares closing 0.36 per cent up on Tuesday, despite a 2.07 per cent drop for the broader market .

Having ridden itself from dealing with Digital Display, Lite-On will apparently now have more time to spend on cutting costs, focusing its business efforts on power supply and LED backlighting, and aiming at higher profitability. µ