Taiwan's Asia Optical, Flextronics in Hong Kong JV

TAIPEI, March 23 - Taiwan's digital camera equipment maker Asia Optical said on Monday it will set up a Hong Kong joint venture with Singapore's electronics maker Flextronics to manufacture digital cameras.

Analysts said the move will help digital camera makers cut costs during a global downturn and as margins in such cameras shrink due to market competition.

Asia Optical did not reveal the size of the joint venture, but said in a brief statement the new company would manufacture digital cameras on behalf of clients in the Japanese, Taiwanese and Chinese markets.

Flextronics was not immediately available for comment.

Flextronics said earlier this month it would cut jobs and close facilities to cope with a weaker global economy, and expects to save between $220 million and $250 million through the restructuring plan.

Major electronic brands typically do their design in-house, but outsource the labour-intensive manufacturing work to original equipment manufacturers (OEMs) such as Flextronics and Hon Hai.