Notebook vendors have asked ODMs and component makers to lower quotes in an attempt to maintain profitability due to stagnant demand, according to Taiwan-based supply chain makers.
Among notebook vendors, Lenovo was the fist to ask for cut, the sources indicated. At a Lenovo suppliers conference held in China, company CEO Yang Yuan-qing emphasized that reducing production costs is Lenovo’s main goal in 2014, the sources noted.
There will be more demand for price cuts as notebook vendors will begin to release RFQ (request for quotation) for 2015 in June 2014, the sources indicated.
To cope with demand to reduce quotes, ODMs will have to lower costs for components including chassis, connectors, power supplies and heat-sink modules and China-based makers have an advantage over Taiwan-based makers in this respect, the sources said. In addition, ODMs have been making long-term efforts to automate production to offset the impact of climbing wages in China, the sources commented.