AST Will Build $16-Million PC Plant in China : Manufacturing: The facility's first project will be to make 40,000 personal computers in an $80-million deal.

AST Will Build $16-Million PC Plant in China : Manufacturing: The facility’s first project will be to make 40,000 personal computers in an $80-million deal.

By DEAN TAKAHASHI

Sept. 8, 1993 12 AM PT

TIMES STAFF WRITER

IRVINE —

In a sign that U.S. personal-computer makers are exporting their market-share wars abroad, AST Research Inc. formally announced Tuesday that it will build a manufacturing plant in China.

Under a joint venture with the Chinese government, AST will build a $16-million plant in Tianjin, about 60 miles south of Beijing. The plant, which will employ about 400 people, is to open in September, 1994.

AST said it needs the plant to fill the largest contract it has negotiated to date in China: an $80-million deal with Legend Technology Ltd., a seller of PCs, to build 40,000 computers.

AST officials will dedicate the plant at a ceremony on Thursday with more than 500 guests and officials present, including Safi U. Qureshey, chief executive of AST.

“Our new joint venture marks a forward leap in the evolution of the company’s long-term commitment to the Chinese market,” Qureshey said in a statement. “It will not only strengthen the company’s No. 1 position in China, it also will serve to enhance our presence throughout the entire Asia-Pacific region.”

AST is the sales leader in China, with about 27% of that nation’s fast-growing PC market, according to International Data Corp., a market researcher in Framingham, Mass.

AST’s 1992 sales in China were $118 million. The total market was valued at $439.1 million, with Compaq Computer Corp. ranking second with $81 million, or 18.5%. Most of those sales are to government agencies, leading analysts to suggest that there is vast potential in China’s home-computer market.

AST, which acquired the computer manufacturing operations of Tandy Corp. in July, is the fourth-largest computer maker in the United States, behind Compaq, Apple and IBM. Fierce price wars in the past year, led by the top-tier companies, have driven PC prices down 40%.

AST’s latest move overseas is certain to heat up the international competition and lead to an intensified battle with Compaq, which announced in July that it had signed a joint-venture deal to build a 200-employee PC manufacturing operation in China. Compaq’s plant is expected to begin production in December.

Compaq entered the Chinese market in 1984 and began a marketing push in 1990. AST, meanwhile, opened a plant in Hong Kong in 1985 and began selling PCs in China in August, 1987. It became the biggest PC seller in China in 1990, according to market researcher International Data Corp. In addition to the plant in Tianjin, AST has opened a sales office in Chengdu.

AST will own 90% of the new venture. The company’s partner is the Tianjin Economic Technological Area Business Development Co., a government agency.

Two key AST officials--Philip Wong and Billie Lui--will have expanded roles in developing the Chinese market. Wong will be vice president of AST’s Asia-Pacific operations, which include 14 countries. Lui will be vice president of the company’s Asia manufacturing.