DigiTimes heard Acer recently decided to increase the percentage of its notebook production in Chongqing, China to 90%. The site notes local supply of labor and components is expected to be tight due to increasing production in Chongqing, as well as Chengdu, both being in western China.
As growth of the notebook industry slows down, ODM firms have been more sensitive to production cost changes. While scattered manufacturing plants mean higher production costs, the ODMs have been working towards centralizing their production. Nevertheless, brand clients have been more eager to diversify risks by issuing orders to plants in different locations. But the ODMs have managed to have Acer agree to shifting most of its production to western China.
HP has shifted production for most of its notebooks to Chongqing while Dell and Lenovo's production mainly takes place in Chengdu. As for Acer, its major ODM partners Quanta Computer and Wistron have moved 100% of their notebook production capacity to Chongqing while Compal Electronics, which maintained 50% of capacity in Kunshan and 50% in Chongqing in 2012, will increase the proportion of capacity in Chongqing to 90% in 2013, the sources said, adding Compal will start moving its equipment in the second quarter.