Supply chain to face challenges preparing for Windows 8 notebooks

Aaron Lee, Taipei; Joseph Tsai, 10 September 2012
Windows 8-based notebook shipments are expected to start increasing in September as the launch date of the operating system approaches, but because most orders are scheduled for shipping in September and October, sources from the upstream supply chain are concerned that related supply chain players will face great challenges in terms of capacity management and production smoothness.

The first batch of Windows 8-based notebooks was shipped in late August via marine routes and were all models without touchscreen panels. For models equipped with touchscreen panels, ODMs are still in the processes of conducting final adjustments and debugging, and finished products are only expected start shipping in late September by air.

Seeing that Europe and the US are suffering from the economic downturn, PC brand vendors are mostly taking a conservative attitude about the PC market's future and have been delaying the shipment schedules of their Windows 8 notebooks, which has tightened their upstream supply chain partners' available processing time.

Since touchscreen functions are one of the major highlights of Windows 8, Microsoft is being extremely careful about the feature and has demanded vendors submit all touchscreen panels to it for certification to ensure that quality and responsiveness meet its standards. The strategy has caused a further squeeze on the supply chain's available production time.

PC brand vendors are mostly confident that Windows 8-based notebooks will bring in a new wave of PC replacement, but due to the high cost generated by the adoption of touchscreen panels, most of them believe market demand is unlikely to increase until 2013.