Taiwan-based handset ODMs buying more parts and components from suppliers in China

Daniel Shen, Taipei; Steve Shen, DIGITIMES [Monday 12 May 2014]

Taiwan-based handset ODMs have been purchasing more handset components and parts from the supply chain in China in order to lower their production costs, according to industry sources.

The ability of China-based smartphone vendors to roll out models with high price/performance ratios has forced international handset vendors to ask their hardware production partners in Taiwan to seek alternative parts and components to further improve the competitiveness of their products, said the sources.

Previously, Taiwan-based handset ODMs relied mostly on the supply of high-end parts and components from suppliers in Korea and Japan in order to meet quality requirements set by international brand handset vendors, the sources noted.

By switching orders to suppliers in China, some ODMs said that they have been able to reduce prices of parts and components by 10-15% on average, and some others even up to 20-30%.

To ensure product quality, Taiwan-based ODMs also prefers to deal with those suppliers which have been shipping parts and components to China-based leading brand vendors such as Huawei, ZTE, Lenovo, Coolpad and Xiaomi Technology, the sources indicated.

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