Joint venture between Lenovo, Compal to produce 12-13 million notebooks in 2013

Lenovo and Compal Electronics' notebook production joint venture in China will manufacture 12-13 million notebooks in 2013, according to Compal president Ray Chen. The amount is expected to account for about 43% of Lenovo's estimated notebook shipments of 30 million units for the year.

Lenovo's actions of raising its in-house notebook production are expected to impact Taiwan-based notebook ODMs as well as related upstream component suppliers, as Lenovo has started shifting its component orders to China-based makers.

The joint venture started production in December 2012 with initial shipments of 500,000 notebooks a month, and the volume will rise to one million units in the first quarter of 2013.

Chen also believes that Lenovo is unlikely to plan for full in-house production, but the China-based vendor will definitely start inviting more China-based players to enter its upstream supply chain.

Chen also noted that such a move should drive Taiwan-based supply chain players to become more competitive and also better at cost control, while expanding the supply chain to increase the overall supply capacity.