Facing rising labor costs, several notebook ODMs such as Quanta Computer and Compal Electronics are starting to push automation across their production lines in China for 2014. Compal expects automated production to save 2% of its production costs.
In addition to adopting automated production lines, ODMs will also accelerate their pace to shift notebook production to plants in inland China.
Quanta pointed out that there are two types of automated production lines currently available in the notebook ODM industry: surface mount technology (SMT) machines for printed circuit boards (PCBs) and robotic arms for assembly lines. PCB production with SMT machines is already a trend in the market and the company is currently testing robotic arms, the company noted.
Since minimum wages in China are rising 10-15% every year, Compal expects automation to help save cut costs and through product design changes, company president Ray Chen believes the company has a chance of avoiding the 10-15% labor cost increases expected in 2014.
In addition to notebook ODMs, battery maker Simplo Technology and Dynapack as well as several Taiwan-based cooling fan makers are also accelerating their implementation of automated production.
However, some players pointed out that automated production lines still face the risk of order changes and amortization issues.