Chinese state-owned PC, peripherals and parts manufacturer Great Wall Technology, which is hoping to raise about $160m from an international initial public offering this week prior to an August 5 listing on the Hong Kong Stock Exchange, has announced its spending plans for the proceeds.
He said that around $35m will go towards a stake in a $100m joint venture with Texas Instruments to make digital signal processing chips, while $10m is earmarked for the company to expand into internet-related business and the bulk will be used to beef up its PC and hard disk drive manufacturing facilities.
Great Wall is working towards meeting the insatiable demand of the PC market in China, said company chairman Wang Zhi, who predicted annual average growth in PC sales of 27% over the next few years. The company now derives the bulk of its income from making HDD components thanks to the increasing trend amongst its top clients such as Seagate, Western Digital, Maxtor and IBM to outsource HDD components.
Great Wall made the first domestically-produced PC in China in 1986 and for several years was the leading local PC maker but newer firms such as current market leader Legend, Tontru and Founder overtook it in the mid 1990s. However thanks to its heavyweight government sponsors it was able to form a number of key joint ventures, including three with IBM.
