Some component manufacturers in the ODM laptop supply chain have apparently slowed down the pace of relocating the production base to western China.
For notebook ODMs, the relocation of the production line to western China would mean a unit cost increase of 4-5 US dollars or a gross profit margin of 1 pp. The gross margin of these manufacturers is generally 3% to 4%.
Previously, local governments in Chongqing and Chengdu promised to relocate laptop ODMs. However, most laptop ODM vendors have not received any compensation from the local government.
Notebook ODM vendors, including Quanta Computer, Compal Electronics, Wistron and Inventec, have moved parts of their production facilities to western China and have also tried to increase their ODM prices based on customer requirements.
Despite rising production costs, most laptops ODMs stated that the current policy of partial production migration to western China remains unchanged to diversify production risks.
For notebook ODMs, the relocation of the production line to western China would mean a unit cost increase of 4-5 US dollars or a gross profit margin of 1 pp. The gross margin of these manufacturers is generally 3% to 4%.
Previously, local governments in Chongqing and Chengdu promised to relocate laptop ODMs. However, most laptop ODM vendors have not received any compensation from the local government.
Notebook ODM vendors, including Quanta Computer, Compal Electronics, Wistron and Inventec, have moved parts of their production facilities to western China and have also tried to increase their ODM prices based on customer requirements.
Despite rising production costs, most laptops ODMs stated that the current policy of partial production migration to western China remains unchanged to diversify production risks.
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