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Taiwan ODMs Pulling Back Production from Mainland in Wake of US Import Tariffs

You could see more "Made in Taiwan" and lesser "Made in China" on the shelves of your friendly neighborhood Microcenter, as major Taiwanese original device manufacturers (ODMs) are considering moving manufacturing back from Mainland China to Taiwan. ODMs are contract manufacturers of PC hardware, which take designs from [mostly western] electronics companies, and turn them into marketable product.

Among the first such ODMs is Quanta Computer, which manufactures some components in Shanghai, with server assembly either in Fremont, California; or just outside Cologne, Germany. The move is triggered by harsh import tariffs imposed by the Trump Administration on imports of electronics goods from China (PRC), running up to 25 percent, as part of the ongoing trade-war between the world's top-two economies. Tech stocks are rattled at the prospect of cheap hardware imports getting significantly pricier for American consumers.

Quanta Purchasing CNC Machines for Unibody Manufacturing

As notebooks get slimmer with the advent of Intel's Ultrabook specification, designers will be faced with hurdles when it comes to choosing the right materials that give their products the sturdiness of conventional notebooks, while not adding to the weight much. ABS plastic might not cut it anymore, and designers might be forced to follow the footsteps of Apple, by designing chassis similar to its Apple Unibody, which is milled out of a single block of aluminum, and offers better structural rigidity and heat dissipation compared to ABS, at those extremely compact dimensions.

Major notebook ODM Quanta Computer is making large scale purchases of CNC machines to gear up for an influx of designs (mostly Ultrabook), that employ metal uni-bodies. Quanta is a contract-manufacturer to some of the biggest notebook brands. With the increasing labor costs in China possibly set to affect ODMs' 3-5% gross margins, ODMs are becoming more aggressive about controlling their costs, and vertical integration has become a major tactic to help reduce costs. What this means to the end-user is that a good proportion of Ultrabooks will employ metal uni-bodies.

AMD Flogging Dodgy Chips? Gets Slapped With Lawsuit

AMD has been slapped with a lawsuit by Quanta for allegedly selling faulty CPUs & GPUs that were unfit for purpose, since they didn't meet specified heat tolerances and subsequently failed. Taiwan-based Quanta may not have a name that the general public immediately recognizes, however they are actually the world's largest contract manufacturer of notebooks, so this lawsuit is a big deal. They claim that the faulty parts were used in notebooks made for NEC. The lawsuit was filed in a district court in San Jose, California and in the filing, Quanta claims they have "suffered significant injury to prospective revenue and profits". As Bloomberg reports, "the lawsuit also claims breach of warranty, negligent misrepresentation, civil fraud and interference with a contract."
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May 10th, 2024 23:53 EDT change timezone

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