HP to Boost Singapore Production

Hewlett-Packard Co. on Tuesday said it planned to invest $1 billion in Singapore over the next five years as it shifts some manufacturing of its highest-end computers to the island nation.

The world’s No. 2 computer maker said the production lines in Singapore would be used to cater to growing demand in Asia, especially in China and South Korea. Hewlett-Packard has more than 6,000 workers in Singapore and thus is one of the largest foreign investors.

“We will be building new manufacturing sites and enhance our current investments in Singapore,” said Paul Chan, managing director of Asia-Pacific at Hewlett-Packard.

The investment is significantly higher than what the Palo Alto-based company has made in Singapore in the last five years, Chan said. The company declined to disclose incentives given by the Singapore government for the investment.

The company said it would shift part of the production of its high-end Superdome servers out of the United States to Singapore in a bid to save costs and speed delivery to its Asia-Pacific customers.

There are sizable cost savings in moving production of servers for the Asia-Pacific market to Singapore because the country is closer to the market’s customers, Chan said.

He declined to be more specific on cost savings but said it was not a labor-intensive manufacturing process that required “hundreds of production workers.”

Hewlett-Packard has sold more than 500 of the refrigerator-shaped Superdome servers in the Asia-Pacific region. The servers, which cost $300,000 to $9 million each, allow corporations to run multiple operating systems on one platform and support large-scale applications and databases.

Hewlett-Packard customers in the region include Singapore Telecommunications Ltd., which runs its Internet service using Superdome servers; Singapore Airlines Ltd.; and FedEx Corp., as well as memory-chip maker and electronics giant Samsung Electronics Co.

Bloomberg News and Reuters were used in compiling this report.