Fitch cuts Acer, Asustek, Quanta

As part of an Asia-Pacific Technology sector-wide review, Fitch Ratings said it has taken negative rating actions on three Taiwanese personal computer companies - Acer Inc., Asustek Computer Inc. and Quanta Computer Inc.

The agency also said it revised the outlooks on Acer and Quanta to negative from stable.

Fitch also said China's ZTE Corp.'s long-term foreign-currency and local-currency issuer default ratings were affirmed at BB+ with stable outlook.

Acer's long-term foreign-currency and local-currency issuer default ratings were affirmed at BBB- and national long-term rating at A(twn). Its outlook was revised to negative.

Asustek's long-term foreign-currency and local-currency issuer default ratings were downgraded to BB+ from BBB- and placed on rating watch negative. Its national long-term rating was downgraded to A-(twn) from A(twn).

Quanta's long-term foreign-currency and local-currency issuer default ratings were affirmed at BB and its outlook was revised to negative from positive. Its national long-term rating was affirmed at BBB+(twn).

The actions on the Taiwanese PC companies reflect Fitch's view that deterioration in operating performance will be inevitable in 2009 due to the current global economic turmoil, which is expected to last until at least midway through 2010, the agency said.

The computer companies are likely to face significant demand contraction as corporations and consumers' abilities to buy or upgrade their computers has diminished, Fitch said.

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