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SCMP Reporter

COMPUTER whiz Stan Shih has had his sights set on being Number One since his teens.

  The man behind the breathtaking rise of Acer Inc from a small-time player into Taiwan's largest computer manufacturer made his mark early when he developed Taiwan's first calculator in his 20s.

   In the mid-1970s, a company he led developed the world's first pen watch. Years later, Acer was one of the first firms in Asia to develop an IBM-compatible personal computer.

   Now, aged 49, Mr Shih leads a company that is quickly becoming a household name in the United States and which has distinguished itself with a string of technological breakthroughs.

   ''You have to be innovative these days,'' Mr Shih said. ''It's unbelievable we have lasted so long. We are so lucky.''    He said that aside from being innovative, the secret behind Acer's success was offering quality service and keeping good communications with the media and customers.

   Costs also have been cut by moving some manufacturing operations offshore to Malaysia and the US, but Taiwan is still its largest manufacturing base - accounting for about 80 per cent of its total output.

   This strategy has helped Acer survive a recent downturn in the global demand for personal computers and price wars initiated by US-based computer firms such as Compaq - not to mention problems at home such as rising labour costs and the appreciation of the Taiwanese currency.

  Taiwan is the world's third-largest personal-computer maker, behind the US and Japan.

   With growth rates of about 10 per cent a year, Taiwan has become a world leader in the manufacturing of motherboards and monitors, spending more on imports of semiconductors than it does on crude oil.

    While most of Taiwan's 4,000 or so computer firms are small operations with only a few employees and making products for overseas firms, Acer has more than 5,000 employees and promotes its own brand name.

   Acer was launched in 1976 as Multitech International Corp, with a registered capital of US$25,000 and 11 employees, the capital coming from Mr Shih and a few close school friends.

   By 1980, the firm started manufacturing its own products - including an award-winning Chinese-language terminal. Six years later, Acer beat IBM in coming out with a 32-bit personal computer. Acer shipped its one millionth computer in 1989.

   Mr Shih's dream is to make Acer into one of the world's top five computer firms by 1995. Judging by his pace of work - Mr Shih and his senior staff are often in their central Taipei office until late evening - this goal appears possible.

   The Acer chief frequently appears in company advertisements and communicates to employees through a monthly newsletter.

   The building of Acer was not all smooth going. Large investments in two American firms - Altos Computer Systems and Texas Instruments Inc - were partially to blame for Acer posting its first loss in 1991 of $22.7 million.

    The firm was able to post a slim profit last year. On revenues of $1.19 billion, Acer posted a profit of $2.2 million.

   This year, Acer expects to do even better, ending the year with net profits of $30 million on sales of $1.4 billion.

  ''Although we paid a lot for the US investments, the result was limited,'' Mr Shih said.

   With Texas Instruments, Acer has a 58 per cent stake in a joint venture to make memory chips and specialised microchips.

    He said Acer's biggest challenge was to gain a larger share in the major markets.

   In the US and European markets, Acer has only a one or two per cent share, although sales of its PCs in the US have been boosted by putting them on store shelves in large chains such as CompUSA, Best Buy and Wal-Mart.

  ''Our biggest challenge now is to better manage our international operations,'' Mr Shih said.

   To better project Acer into the more competitive markets, Mr Shih came up with the idea of getting distributors to set up independent Acer franchises.

  Modelled loosely on the fast-food industry, the idea is to have franchisees assemble and monitor production quality with key components provided by Acer.

  Designated retailers are licensed to received Acer's PC module assembly know-how.

  ''The idea is that the distributor or dealer would assemble PCs on behalf of us for the customer,'' Mr Shih said, adding that the system would better meet customers' needs and keep the inventory in component form.

   This would lower Acer's shipping costs and make it easier to update its products.

  ''Acer will use these franchise-style operations to supply fresh PCs that are assembled close to the market, configured to meet specific requirements and reasonably priced,'' Mr Shih said.

  ''No other PC company has the strength to implement this fast-food strategy.''    Acer now has 15 final assembly sites and hopes to have double that number by the end of this year and 100 sites by 1995.

    Last year, Acer unveiled one of its most innovative products to date - the AcerPAC or personal activity centre.

   Labelled as ''the world's first multi-media workstation'', the unit incorporates communications, personal electronics and computer applications.

   Designed for the small business or office, the desktop personal computer has a speaker phone, answering machine, fax, and a stereo system with a CD player and AM/FM radio.

  Company facts and figures Number of employees: 5,480 (50 offices in 13 countries) Figures for the quarter ended March 31, 1993 Total revenue: US$330.1 million Earnings before taxes: $1.1 million Net earnings: $500,000 Total assets: $1.1 billion Net investment in property and plant:$148.2 million Working capital: $103.6 million Figures for 1992 Total revenue: $1.19 billion Earnings before taxes: $5.5 million Net earnings: $2.2 million Total assets: $1.09 billion Net investment in property and plant: $179.6 million Working capital: $112.4 million Stockholders' equity: $373.6 million Number of stockholders: 70,200 



Acer ready to take on the world