Compaq Computer Corporation and Subsidiaries - Page 11




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          including U-shaped continuous flow manufacturing lines, no-clean,           
          paste-in-hole, and wave soldering of bottom-side SOIC's.  Compaq            
          Asia was also responsible for improving designs and manufacturing           
          processes for all Compaq Asia PCA's and CPU's, including designs            
          for custom power supplies, and Compaq Asia built PCA's with                 
          multiple fine pitch components that required critical process               
          controls to reduce rework and maintain quality.                             
               As with Compaq U.S., the top priority of Compaq Asia was to            
          produce high-quality products.  Compaq U.S. developed in-house              
          workmanship standards that specified acceptable and unacceptable            
          quality of PCA's.  All manufacturing sites, including Compaq Asia           
          and unrelated subcontractors, were required to comply with these            
          standards.  To ensure quality, Compaq Asia conducted extensive              
          in-house training and used statistical process controls to                  
          monitor the processes so Compaq Asia engineers could take quick             
          corrective actions if necessary.  As a result, Compaq Asia                  
          achieved ICT first-pass yields of 98 percent in 1991 and                    
          97.2 percent in 1992 and functional test first-pass yields of               
          98.5 percent in 1991 and 98 percent in 1992.                                
               Compaq Asia was more advanced than other Singaporean PCA               
          producers that primarily produced PCA's for disk drives and other           
          small electronic devices, which had few technological,                      
          manufacturing, and process control requirements.  Accordingly,              
          Compaq Asia did not compete with those companies because those              





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