Notebook ODMs see inland plants only able to deliver 60% of orders due to labor shortage
Aaron Lee, Taipei; Joseph Tsai, DIGITIMES [Monday 28 October 2013]
The labor shortage at Taiwan notebook ODMs’ plants in Chongqing, China is reportedly becoming more serious recently and the plants are currently only able to deliver 60% of their orders, down significantly from 80-85% originally, according to sources from the upstream supply chain.
Some ODMs have already shifted their orders back to plants in Eastern China, the sources noted.
The sources pointed out that Chongqing’s labor volume is smaller than that of Eastern China, while most labor in Chongqing are unwilling to work overtime and are having difficulty becoming familiar with the notebook manufacturing’s working schedule. As the ODMs are all raising their capacities at inland plants to satisfy client demand, insufficient labor volume has already become the major problem despite local governments being aggressive in trying to help with the shortage.
Currently, over 80% of notebook ODM labor at the Chongqing plants are students from local vocational schools. Although the Chongqing government is looking to raise the proportion of standard workers to 80% by 2014, the sources believe such a goal is unlikely to be realized as China’s labor ecosystem has already changed.
Hewlett-Packard (HP) and Acer both have over 80% of their orders being manufactured in Chongqing, while Asustek has 40% of its shipments supplied from the city. Toshiba is also having its notebooks manufactured in Chongqing and will have combined shipments of five million notebooks and tablets in 2013.
As for ODMs, Quanta Computer has over 50% of its notebook production at Chongqing and the percentage is expected to rise to 70% by the end of 2013. Compal Electronics’ Chongqing plants shipped about 500,000 notebooks per month in the second quarter. Inventec’s plants in Chongqing is at full capacity and will add another 10 million units of capacity after completing its second-phase of plant establishment.