Philips to Outsource Low-End Monitor Business to TPV Technology
Dec 16, 2004
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Philips Electronics, Amsterdam, The Netherlands, is to stop making low-end computer monitors for itself and other brands and is to outsource the manufacturing of Philips-branded flat TVs, marking a shift away from volume manufacturing to concentrate on technology development.
The Dutch electronics giant said it would hand over its low-end monitor business, which makes PC screens to be sold under other brands, to TPV Technology of Hong Kong. The move will make TPV the world's largest PC monitor manufacturer, Philips said.
In return for this and the outsourcing deal, worth U.S. $2 billion, Philips is to take a 30-percent stake in the enlarged market capital of TPV, which is worth $358 million. Philips said this would be settled through a 15-percent shareholding in TPV, from a new issue of shares, and a convertible bond.
"This partnership marks an important next step in the transformation of Philips' Consumer Electronics business from a volume-driven manufacturing business to an innovation and marketing-driven business," said Gottfried Dutne Philips board member.
Philips said it would continue to make mid- and high-end Philips-brand flat TVs and to market and sell PC monitors and flat TVs under the Philips brand only.
TPV is to take on 1,700 Philips employees in manufacturing plants in China, Hungary, and Brazil. (AFX)
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