Lite-On Takes Over BenQ’s ODD Business Unit

[Ian]

This could be good or bad news depending on how you look at it.

http://www.benq.com/press/News.cfm?id=1271&cat=0

Lite-On IT and BenQ to Form a Strategic Alliance through Manufacturing Integration in Optical Storage Products

TAIPEI, TAIWAN, 10 April 2006 - Lite-On IT and BenQ today announced that they have formed a strategic alliance that will bring together two of the industry's leading players and enhance the overall competitiveness of Taiwan's storage sector. The transaction is expected to increase Lite-On IT's global market share to 27%, making it the world's No. 2 optical disk drive (ODD) maker.

As part of the alliance, Lite-On IT will acquire BenQ's storage-related assets, including BenQ's ODM customer portfolio and the rights to use BenQ's technology portfolio. Lite-On IT will also receive order commitments on BenQ-branded storage products.

“This strategic alliance combined with our manufacturing advantages, will allow Lite-On IT to further sharpen its competitiveness in the ODM market and become the No. 2 ODD manufacturer worldwide,” expressed Raymond Soong, Chairman of Lite-On IT. “In partnering with BenQ, Lite-On IT expects to benefit from increased manufacturing efficiency, greater economies of scale, and a larger market share.”

“We believe our customers will benefit from this powerful partnership,” commented K.Y. Lee, Chairman of BenQ Corporation. “BenQ will continue focusing on the marketing and sales of our storage products and this strategic transaction will allow BenQ to better address our ODD branded and 3C opportunities and customers’ needs,” added Mr. Lee.

Terms and Conditions
Lite-On IT will acquire BenQ's storage-related assets, including BenQ's ODM customer portfolio and the right to use BenQ's technology portfolio consisting of storage-related patents and licenses. Lite-On IT will also receive order commitments on BenQ-branded storage products. BenQ will receive approximately NT$1.2 billion in cash and acquire a 13% stake in Lite-On IT. With this transaction, BenQ will become Lite-On IT's second largest shareholder and a long-term strategic partner. Additionally, BenQ will acquire two seats on Lite-On IT's board of directors. Both companies expect to close the transaction on or about 1 June 2006.

I wonder how this will affect Lite-On's manufacturing deal with the joint venture between NEC and Sony. Are we going to see the same drives being sold under the Lite-On, BenQ, NEC and Sony brands?

[[buck]]

Oh... crap

[dodecahedron]

well, it depends of LiteOn-BenQ DVDRW drives will be like Lite-Ons or like BenQs ... ?
we can only hope...

[dolphinius_rex]

This is nearly the worst possible thing I could imagine happening....

[jberry]

still is LG....their stuff has never let me down....but not as flexible as Benq 1640 fer me....I still have 1620 too

[[buck]]

This is nearly the worst possible thing I could imagine happening....

Yes, this really is one of the worst scenarios possible.

I was thinking... pretty soon, there won't be a whole lot of independant drive manufacturers, will there? Sony/NEC/LiteON/BenQ will likely all be one, and leaves LG, Samsung/Toshiba, and Pioneer. Pioneer recently announced that they were getting out of the DVD writer market, too, didn't they?

I think I may have to stock up on BenQs before they're all gone...

edit: forgot about Plextor

[Ian]

No, I don't think Pioneer is getting out. However, their Blu-ray drives will be their main focus. As it is, they've stopped pimping their regular DVD writers to reviewers, at least in the US.

[Scour]

Hello!

This is awful news

I like my Benq really, and lot of friends say this, too. Nobody wish to replace his Benq with a Liteon

[Gen-An]

In all fairness, the latest Lite-On offerings have been pretty solid.

[Ian]

Yes, they're much improved but not up to BenQ standards yet.

[MonsterMan]

This is nearly the worst possible thing I could imagine happening....

Agreed. Oh well...I've still got my 1620...

[dodecahedron]

well, when you guys all get over the wailing part, maybe you'll come around to seening that it may not be all that bad.

As part of the alliance, Lite-On IT will acquire BenQ's storage-related assets, including BenQ's ODM customer portfolio and the rights to use BenQ's technology portfolio. Lite-On IT will also receive order commitments on BenQ-branded storage products.

(my emphasis).

does anyone here really think that Lite-On are not aware of the performance issues with their drives, and aren't trying to solve them?
think of Lite-On in the CDRW days!
if Lite-On gets to use BenQ's technology, this merger might not be a bad thing.

[MediumRare]

I don't like the idea because it reduces competition.

BUT- aren't you guys basing your judgement of BenQ drives on those using the Nexperia chipset? I was under the impression that BenQ is moving away from that- Panasonic for the DQ60 (??) and other RAM-capable drives and rumours of Mediatek for other new drives.

What makes you think that those will be as good as the ones with Philips involvement?

G

[Dartman]

Crap! Well lets hope they don't muck with the good BenQ drives and continue to make them rather then start stuffing LiteOns in BenQ wrapers with all the worst parts of Litey remaining. I will never buy another LiteOn dvdrw drive after my 2 attempts to get a OK 811. My BenQ's have been stunning drives, My original 1600 is still working happily as a 1620 pro as are my 1640 and 55.
Hopefully they also inherit some engineers that can program firmware and stick with phillips chips.

[Halc]

I can't remember, what's the score on Philips?

Are they getting out, or is the BenQ/LiteOn deal also a sign of future Philips drives being LiteOns, with whatever chip LiteOn uses?

I just hope that kProbe/LiteOn scans won't become the only/defacto consumer scan combo, due to all these developments. That combo is utterly lacking, it's not enough on its own.

Combine this with SonyNec ODD camp using LiteOn for manufacturing and what we basically have lef is Plextor, for doing scans.

<sigh>

Let's hope this development turns out alright.

[pchilson]

Man, I remember in the days of the CD writers how Lite-On was the champ, the drive everyone wanted and poor old BenQ was the crap you kicked out of your way to get to the Lite-Ons.
Now everyone is lamenting the fact that Lite-On is taking over BenQ.
How times change...
I really don't care who builds them and what name is on the bezel (unless it is SONY ) if it is well designed, well supported with firmware updates and shows itself to have excellent write quality.
I like a company that cares about what they build as well as their profits.

[aviationwiz]

think of Lite-On in the CDRW days!
if Lite-On gets to use BenQ's technology, this merger might not be a bad thing.

The problem is that all recent history shows us that this will be a bad move for consumers. Reduced competition, resulting in worse drivers, with higher prices. *ESPECIALLY* if they take Lite-On drives and stick on a BenQ label.

It's a situation where we need to hope for the best, but prepare for the worst.

[dodecahedron]

reduced competetion due to fewer manufacturers and more rebadgers - that's bad news of course.
mind you that fewer manufacturers doesn't automatically translate into less competition. there's still competition between brands even if they're rebadges.
however lesser diversity of manufacturers is lamentable, of course.

as for Lite-On drives with a BenQ label on them, well we'll have to wait and see, right? could be BenQ drives (technology) with Lite-On labels on them too.

[Scour]

In all fairness, the latest Lite-On offerings have been pretty solid.

But it´s like Ian said, they not a real competitor for Benq-drives.

And Liteon produces some years now DVD-writers and can´t beat the competition from Benq, NEC, LG and Pioneer