As notebook ODMs have recently started accelerating their expansion of production capacity in Chongqing, their upstream chassis suppliers – Zhanyun Chongqing Electronics, Ju Teng and Huan Hsin – have also set out to increase their chassis capacity in the second half of 2012.
Zhanyun Chongqing, a plastic chassis manufacturing subsidiary of Quanta Computer, already has a capacity of 300,000 units in August and is aiming to increase the volume to one million units by October.
Ju Teng is also set to raise its capacity to one million units with an utilization rate of around 70-80%, while Huan Hsin will soon finish its second phase expansion with capacity to also rise to one million units.
After successfully attracting brand vendors to invest in Chongqing, the city government is now turning its focus to related upstream suppliers and expects that once the local upstream supply chain can provide 80% of local demand, costs to produce in Chongqing will reach a similar level as in coastal areas and will no longer require subsidies from the government.
Zhanyun Chongqing has already started establishing new plants which are expected to start operations in July 2013.
Currently, Zhanyun Shanghai can supply about 2.7 million chassis each month and with the 300,000 units from Chongqing, Zhanyun can satisfy 60% of Quanta’s chassis demand and the percentage is expected to rise to 70% in the future.