Contract Manufacturing | 內湖 陽光街385號, 27 February 2014 — The One That Went Back In

The photograph is dated 29 September 2013. COMPAL COMM sits in green letters on the curved glass, 華寶通訊 on the wing beside it. The next day the parent company filed to buy it out of existence. 華寶 started as somebody else's idea. 華山通訊 was founded on 12 February 1999 by 黃健華 and 楊青山 with NT$348 million, and shipped its first dual-band handset that December. Compal put money in during May 2000. The company was renamed 華寶通訊, one founder left, and by June the capital had been raised to NT$2 billion with Compal holding 50.7 per cent of it. What it did was the parent's trade in a different product: designing and building mobile telephones that went to market under other companies' brands. Motorola was the customer that mattered. On 30 September 2013 Compal filed a tender offer for the shares it did not already own, announcing it the following day. The price was NT$50.8 against a closing price of NT$43.5, a premium of nearly 17 per cent, for up to NT$16.13 billion. Compal held about 47.8 per cent going in. The offer closed on 19 November with Compal at 90.39 per cent, and both boards then approved a merger under Article 19 of Taiwan's Business Mergers and Acquisitions Act. That statute is worth noticing. It exists because Taiwanese company law had no way to divide a company when Acer tried to split its brand from its factories at the start of the decade, and the people doing that split lobbied for it. The law written to let a company come apart was used here to put one back together. 華寶 stopped trading on 17 February 2014 and was struck off the exchange on the 27th, the merger's record date. Compal survived; the phone business became its Smart Devices Business Group. Almost everything else in this collection is a company separating its brand from its manufacturing, because a builder cannot serve customers it also competes with. This is the counter-example, and it does not break the rule. Two contract manufacturers with no brand between them have no conflict to manage, so there was nothing keeping them apart and a good deal of cost in staying that way. 陽光街385號 is a five-minute walk from the parent's own tower on 瑞光路, in the same 內湖 technology park. It is a working office building with no visitor access, and the front of it is the whole of what anyone can see. The photograph shows it as it stood in September 2013, with the name still on the parapet. Photo: Solomon203, CC BY-SA 3.0, via Wikimedia Commons.