Taiwan-based component makers in China decrease working times for employees

Aaron Lee, Taipei; Joseph Tsai, DIGITIMES [Wednesday 26 September 2012]

Notebook component factories established by Taiwan-based enterprises in China have reduced working times from 12 hours a weekday and overtime work on two weekend days in the past, to 10 hours and overtime work on one weekend day a week or every other week because orders received are short of expectations and wage rates are on the rise, according to industry sources.

Notebook brand vendors' new Windows 8 notebooks have already been shipped in order to meet year-end holiday demand and the shipments are also expected to boost the performance of ODMs, with an on-month shipment growth between 20-30% in September, and the percentage will grow even higher in October, but will start dropping in November.

However, the shipment growths of ODMs will only contribute a limited benefit to upstream component makers since the ODMs are not aggressively placing new orders to avoid piling up excess inventories.

Since retail channels in Europe reportedly achieved poor results in digesting notebook inventories recently, if demand for Windows 8-based notebooks does not perform as expected, notebook brand vendors are expected to further tighten their inventory management, causing related component orders to weaken.

Notebook component makers are unlikely to enjoy shipment growth
Photo: Michael Lee, Digitimes file photo