Arris will transition its Far East manufacturing of set-tops and modems, selling its Taipei City, Taiwan, operation to longtime production partner Pegatron Corp.
In turn, Arris will shift manufacturing of CPE devices to Pegatron’s Suzhou site in China at the end of this year.
Financial terms of the deal weren’t announced.
With the deal, Arris said it will be able to leverage Pegatron’s scale and investments in emerging technologies. The sale, it added, was part of Arris’ supply chain strategy to simplify its manufacturing footprint.
Adding further context, Multichannel News quoted Raymond James analyst Simon Leopold, who noted that Arris’ margins are being pressured by the rising price of dynamic random access memory on the global market. Arris is looking to shield itself from such price vagaries.
Arris acquired the plant in 2013 amid its $2.35 billion purchase of Motorola Home.
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“Pegatron is a long-term, trusted manufacturing partner of Arris, with a proven track-record of quality and performance, and we expect the transition to be seamless for our customers," said Jim Brennan, Arris senior VP of supply chain, quality & operations, in a statement.
Added Syh-Jang Liao, president and CEO of Pegatron, "Today's transaction builds on a successful 15-year relationship with Arris, during which we have helped them to deliver a range of major innovations to the global marketplace. Pegatron is proud to produce cost-effective, high-quality products; we look forward to continuing our joint success with Arris long into the future.”