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The IT powerhouse that is Taiwan is set to pick up elements of the Sony Vaio notebook line at the end of this year, in another coup for manufacturing on the island.

Not completely coincidentally, the Wall Street Journal has reported that Mosel Vitelic and Japanese company Sharp are to set up a joint venture in a new science park near Tainan, in the south of the island.

According to sources familiar with Sony's plans, large manufacturer Quanta is expected to pick up the deal. It is the largest notebook manufacturer on the island, churning out an estimated two million units last year, very few of them bearing Quanta's logo. Quanta is also an investor in Transmeta.

Other big notebook players in Taiwan are Compal and Arima, which each made just over one million units last year, and Inventec, with a similar number. There are estimated to be between 20 and 30 other notebook manufacturers on the island, with Acer and Twinhead (which bought ten per cent of Uniwill two weeks back) being the best known names.

Although the Taiwanese firms are justifiably proud of their contribution to notebook production, their customers - including big US brand names such as IBM, Compaq and Dell, and major Japanese players such as Toshiba and now Sony - don't like the world to know their dependence on Chinese manufacturing. Why? Search us.

What this means, is that when you wander around a trade show like Computex, you will see future notebook designs which eventually will transmute into ThinkPads, Armadas, Porteges and now, it appears, Viaos.

The parts which make up the ever-so-fragile notebooks are inherently more difficult to build than desktop parts, and also require more intensive research and development than desktops. For this reason, notebook manufacture is still largely a Taiwanese thing, although outsourcing to mainland China is just beginning to take place.

The manufacturing of desktop components is now firmly established on the mainland, with many of the large companies, such as FIC, Asustek, Abit and others doing assembly in a new science park specifically built so that more or less everything is there in one area. People working in assembly in mainland China may get as much as $30 a month for their labour.

Indeed, just a couple of days ago, Asustek bought Chinese firm Maintek Computers outright for $12 million, and said that its investments in the mainland amounted to around $760 million, with five factories churning out PC components.

Yesterday, the local Taiwanese press reported that the government was to ease restrictions on investment in the mainland. Both Morris Chang, CEO of TSMC and the brains behind Taiwan's semiconductor brawn, and Stan Shih, Acer's CEO, have been pushing for restrictions to be lifted for some years. ®

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