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Taiwanese maker nabs notebook top spot

Contract manufacturer Quanta made more notebooks than any other company worldwide last year, says a new study. It's part of a growing outsourcing trend.

Taiwanese contract manufacturer Quanta made more notebooks than any other PC maker worldwide last year, as the trend for technology companies to outsource work continued.

The company produced 5.4 million notebooks last year, a 22.8 percent increase on the year before, according to a report released this week by market research firm iSuppli. The vast majority of these laptops were made for, and ultimately sold by, multinational brand-name computer companies such as Hewlett-Packard, Dell Computer and Sharp.

Quanta's compatriot rival Compal, meanwhile, made 4.1 million notebooks in 2002--an increase of 72.7 percent on the previous year--for many of the same companies.

Despite the growing importance of China, Malaysia and other countries in the information technology outsourcing market, Taiwan appears to be keeping its profile high and even gaining share. Notebooks made in Taiwan accounted for around 65 percent of laptops shipped last year, according to the iSuppli report, up from 58 percent in 2001.

The reason for the increasing growth lies partly in the changing nature of the work these contract manufacturers perform. In the past, they primarily manufactured systems from blueprints forwarded by their multinational clients. Now, brand-name original equipment manufacturers, or OEMs, submit performance specifications, and companies such as Quanta, Compal and Wistron design the notebook and provide other engineering services.

While HP, Dell and other multinationals do still make some of their own computers, they are increasingly hiring contract manufacturers to do it for them.

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Most multinationals have built plants in China to take advantage of the low labor costs in that country. Last year, a notebook cost $25 less to manufacture in China than in Taiwan, according to an estimate from Carter Tseng, CEO of Taiwan-based Microtek, a major scanner manufacturer.

Despite this, there is a flow of work from China to Taiwan, according to the iSuppli report. "A number of Chinese PC makers are also placing orders with the Taiwanese," it stated. "For example, Quanta has received orders from China's largest PC maker, Legend, which has approximately 30 percent of the China notebook PC market."