TAIWAN – ODM handset maker Arima Communications and EMS provider Elcoteq have temporarily set aside merger talks in favor of joining forces to produce low-cost handsets for LG Electronics, company sources told DigiTimes.
 
Merger talks for the past three years recently have hit a deadlock, with the two firms disagreeing over the scale of equity acquisition, DigiTimes reported.
 
Arima wished to acquire part of Elcoteq's assets to integrate its own ODM capability with Elcoteq's EMS strength in handset production; Elcoteq was more apt to sell its assets in a bundled deal, the sources told DigiTimes.
 
Under the new cooperation plan, Arima will switch its outsourcing of LG's low-cost handsets targeting the Latin American market from Flextronics to Elcoteq's plant in Brazil, with production volumes likely to reach several million units, according to DigiTimes' sources.