Metal chassis plants in Kunshan, China are seeing customers seeking supplies elsewhere, as they have been ordered to suspend production pending local government inspections since an explosion hit one of them, according to industry sources.
The blanket suspension, following the explosion at a plant of Waffer Technology's subsidiary on March 31, is likely to last through the end of October, said the sources.
The sources said that notebook vendors are moving to adjust their supply sources of metal chassis to prevent their shipments from being affected in the upcoming high season, prompting major metal chassis suppliers including Catcher, Ju Teng and Foxconn (Hon Hai) to vie for more orders from the vendors.
Waffer's plant in Kunshan mainly produces aluminum alloy parts for automakers, as well as magnesium alloy casings for notebook vendors including HP, Dell and LG Electronics, with HP commanding a larger portion of the supply, the sources continued.
At the moment, Ju Teng and Foxconn, also among the suppliers of metal chassis for HP notebooks, are striving to land more orders from HP and other vendors. Ju Teng's subsidiary Compal Precision Module is expanding its magnesium alloy processing capacity at its plant in Nanjing, China to fulfill part of the orders diverted from Waffer's clients.
Foxconn is also expandig capacity at its existing magnesium alloy processing plant in Yantai, northeastern China to meet increasing demand from clients.
Catcher is reportedly negotiating with HP for possible shift of orders. The company is also seeking switch of orders for aluminum alloy automotive parts from Waffer's clients. Catcher has relocated its production from Suzhou to another two Jiangsu cities of Taizhou and Suqian, with its production unaffected by the Kunshan explosion.
Article translated by Willis Ke
