Taiwan component makers worried about Lenovo plans to hike in-house notebook production

Aaron Lee, Taipei; Adam Hwang, DIGITIMES [Monday 8 October 2012]

As China-based vendor Lenovo plans to increase in-house production of own-brand notebooks and will therefore procure components instead of letting ODMs release orders, as a result Taiwan-based component makers have felt pressure of losing orders, according to Taiwan-based notebook supply chain makers.

In-house production currently accounts for 20-30% of Lenovo's shipments of notebooks, desktops and other types of PCs, the sources indicated.

Lenovo will have LCFC (Hofei) Electronics Technology, its joint venture with Taiwan-based ODM Compal Electronics in Hofei, northern China, start volume production at the end of 2012 or the beginning of 2013, to increase in-house production of notebooks, the sources pointed out. In addition, Lenovo is setting up PC production lines in the US and will do so in Brazil in 2013, with volume production to begin in 2013, the sources noted.

In addition to increasing in-house production, Lenovo may set up a supply chain consisting of China-based component makers, the sources pointed out.