It was not long, however, before the entrepreneurial bug bit Shih; in 1976, he and several friends founded Multitech International with a $25,000 initial investment. The new firm started by designing hand-held electronic games, then expanded into the distribution of imported semiconductors. Shih renamed his company Acer Incorporated in 1981. The name was derived from the Latin word for acute or sharp.
The company enjoyed its first international success that year with the launch of MicroProfessor, a teaching tool. The company began manufacturing PC clones—computers and components that were sold to larger companies with strong brand names—in 1983. Acer diversified vertically in the late 1980s, soon becoming "one of the most vertically integrated micro-computer manufacturers in the world," according to Los Angeles Business Journal.