Monday, July 4, 2011

Notebook vendors take back chassis purchasing rights from ODMs

Global first-tier notebook vendors Hewlett-Packard (HP), Acer, Dell and Asustek Computer have all recently retrieved back their purchasing rights for notebook chassis from their notebook manufacturing partners and are placing orders directly with chassis makers hoping to secure supply capacity, according to sources from PC players.

Because Intel is aiming to boost the penetration rate of its Ultrabook concept to 40% of the consumer notebook market, the notebook players are concerned that Intel's strategy may cause serious shortages in metal chassis supply, and therefore, have decided to take back related purchasing rights.

The sources pointed out that most of the notebook brand vendors still keep the purchasing rights for the seven key components of notebooks including panels, CPUs, hard drives and batteries, leaving purchasing choice of smaller components such as chassis, cooling modules and hinges, to the notebook makers. But as ultra-thin designs are becoming a new mainstream specification, vendors are returning the purchasing rights for notebook chassis to their own departments to ensure smooth supply in the future.

Sources from chassis makers also pointed out that the notebook vendors have turned aggressive in contacting them recently and are already placing orders for the first half of 2012 to secure supply capacity. Their actions also indicate that demand for metal chassis will increase significantly starting in the first quarter of 2012.

To fulfill demand, chassis maker Foxconn Technology, which currently only has about 9,000 CNC machines for producing metal chassis, is set to purchase 10,000 more CNC machines in the near future, to significantly boost its capacity, while the other major chassis maker Catcher Technology also plans to expand the number of its CNC machines to 13,000-15,000 by the end of 2011.

In addition to chassis makers, notebook makers including Quanta Computer, Compal Electronics, Wistron and Inventec are also working more aggressively on vertical integration in chassis production to increase profitability.

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