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Lenovo plans to quit outsourcing of notebook production

Posted on Friday, January 04 2013 @ 11:20:04 CET by

Lenovo logo
Taiwanese supply chain makers confided to DigiTimes that Lenovo has set a goal to increase the proportion of in-house manufactured notebooks to 100 percent in three to five years. In 2012, the company had about 20 percent of its laptops produced in-house and this year the proportion is anticipated to hit 50 percent.
Lenovo had about 20% of notebook shipments produced in-house in 2012 and plans to hike the percentage to 50% in 2013, the sources said. Lenovo's motivation is to reduce costs through increased control on production processes and to support China-based component makers, the sources indicated. As Lenovo has the second-largest global market share for notebooks, and is expected to ship at least 30 million notebooks in 2013, the company hiking in-house production will have a large negative impact on Taiwan-based ODMs and component makers, the sources analyzed.

However, Taiwan-based ODMs hold the opinion that it will be very difficult for Lenovo to reach an in-house production proportion of 100% in three to five years because it takes time to set up manufacturing equipment, as well as develop quality control, production and logistics management capabilities, the sources said. In addition, 100% in-house production may not be feasible in terms of costs, the ODMs said.



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