Primax Electronics is negotiating with Ability Enterprise to sell its DSC business unit.

This includes an order from Samsung for 100,000-150,000 4-megapixel 3x optical zoom DSCs, according to other Taiwanese DSC makers. Primax declined to comment, and Ability Enterprise claimed no knowledge of the report.

Whether Ability Enterprise will pursue the deal is still uncertain, the Taiwanese makers indicated. Ability Enterprise may already have excess production capacity in 2005, although the chance to further cooperate with Samsung is attractive, the makers stated.

Upon completion of a new factory in China early next year, Ability Enterprise will have a total monthly production capacity of 600,000 DSCs. With a shipment target of five million DSCs for 2005, the company has no need to purchase additional capacity from Primax, the makers pointed out.

Although Samsung will expand its own production capacity and decrease outsourced production to 0.5 million DSCs in 2004, Ability Enterprise is looking to secure additional clients. The company is currently under competitive pressure from Flextronics for Casio DSC orders, according to the makers. Both Ability Enterprise and Flextronics are currently OEM makers for Casio.

From DigiTimes