Abstract
Technology companies in Taiwan can be separated into three categories. One engages in OEM, such as foxconn, has cost advantage, the second one engages in own brand, such as Acer, earns high profits by brand value, and the third one, engages in both OEM and OBM, such as BenQ, Asus, HTC, etc. BenQ and Asus decide to separate their OEM and OBM this year, and they hope their case can be as successful as that of Acer & Wistron. We use the abandon options approach in this study to decide the optimal time for companies to separate their departments of OBM and OEM. Based on the models of McDonald and Siegel (1986) and Fradkin (2004), our study shows that while Acer & Wistron separated at the proper time, BenQ’s case has to be postponed.