Notebook production in Chongqing City, western China, has been impacted by labor shortages, with shipments below order volumes by as much as 40%, according to Taiwan-based ODMs.
Hewlett-Packard, Toshiba, Acer and Asustek Computer have established operating bases in Chongqing while Taiwan-based ODMs Quanta Computer, Compal Electronics, Wistron, Inventec, Pegatron and Foxconn Electronics have set up factories. In addition, nearly 600 component makers have set up factories to support ODMs, and more than 200 more will follow suit, the sources indicated.
Of factory workers in Chongqing, 80% are students and 20% non-students, the sources noted. Vendors and the local government hope to decrease the proportion of student workers to 50%, but this is difficult due to the already short supply of non-student workers, the sources said.
To solve the problem, ODMs have raised wages and improved working conditions to try to attract staff, but this increases production costs and vendors are quite unwilling to accept the increases, the sources indicated. As an alternative, ODMs have appropriated workers from their factories in eastern China to support factories in Chongqing on a short-term basis, the sources noted.
48 million notebooks worth US$19.8 billion were shipped from Chongqing in 2013, the sources cited local government statistics as indicating.