Both Compal and ASUSTek spin-off Pegatrong are set to increase their notebook computer costs. Both companies have started price negotiations with their clients. According to Digitimes the cause for the increases include increased component costs and a fluctuating exchange rate. Digitimes also notes Compal president Ray Chen's observations
With 95% of the world's notebooks in 2009 expected to be manufactured by Taiwan-based makers, Chen said it is time that Taiwan players stop the cut-throat competition among themselves.
I imagine most of these price increases are being catalyzed by the rising costs of doing business in China, which have increased due to a high inflation rate, increased minimum wage and a decrease in tax incentives. All three factors will have a significant effect on these contractor manufacturers since they presumably have their manufacturing bases in China and many of the notebook components are probably sourced there. Ray Chen did say they had persuaded their component suppliers not to increase prices for a short period of time but that now the component prices will in fact increase.
Perhaps Compal have started a trend and notebook contract manufacturers will start to scale up their pricing. However, I don't expect the cut-throat nature of the business to stop
Article 1: Compal in talks with notebook clients for price increases
Article 2: Pegatron to increase manufacturing quotes in 2Q08, says paper
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