Although demand for PCs has started recovering recently and shipments in 2015 are expected to remain at the same level as in 2014, Taiwan’s supply chain is still facing fierce competition from China-based component makers, according to sources from the upstream supply chain.
The sources pointed out that the hinge industry is one of the major battlefields for Taiwan makers, as China-based manufactures such as GT Technology have been expanding their presences in the monitor and all-in-one PC industries. Although notebook hinges are still supplied mainly by Taiwan-based companies, China makers’ aggressive moves have created strong pressure.
In addition to hinges, the competition between Taiwan and China makers has also grown fierce for components such as batteries, cooling modules, cables and connectors.
Currently, Taiwan makers hold an advantage over technology, which may help them to hold the upper hand, but the sources are concerned that the advantages may not protect them for long.
The sources are also concerned that Hewlett-Packard (HP) may consider selling its PC business and that any player able to take over its enormous assets would have a high chance of coming from China.
Currently, China-based Lenovo controls over 30 million units of notebook orders each year and the player has been increasing its in-house production rate and shifting component orders to China-based makers. If HP’s PC business is taken over by a China-based player, the same issues may occur with Taiwan’s orders from HP.
Digitimes Research estimates that Lenovo will ship over 35 million notebooks in 2014 with HP following closely behind, according to the research firm’s latest report about the notebook industry.
Hinge maker Syncmold Enterprise has been focusing on the development of niche products for monitors, LCD TVs and all-in-one PCs. Despite weak market growth, Syncmold’s all-in-one PC hinge shipment growth is expected to surpass 20% in 2014.