2022 ASC 100: Taiwan notebook ODMs to continue riding high

Aaron Lee, Taipei; Steve Shen, DIGITIMES Asia 0

Taiwan-based top-four notebook ODMs - Compal Electronics, Quanta Computer, Wistron and Inventec - all are on the Asia Supply Chain (ASC) top 100 list, with Compal ranked ahead of the other three peers.

Compal president Martin Wong emphasizes that Compal's greatest strengths are its execution capability and teamwork spirit, which is in general something that has been sustaining the longstanding and successful development of Taiwan's notebook ODM industry.

Based on that, the four ODMs are confident that they can continue to ride high even during the turbulent era ahead.

Compal saw its 2021 revenues soar 17.8% on-year to a record of NT$1.23 trillion (US$41.82 billion), with related PC shipments hitting 57.5 million units, up 20% from a year earlier.

Compal is ahead other notebook ODMs in DIGITIMES' 2022 ASC 100 rankings.  Credit: DIGITIMES

Compal is ahead other notebook ODMs in DIGITIMES' 2022 ASC 100 rankings.

In 2022, Compal is confident about its business prospects, despite facing a slew of industry uncertainties such as uneven supplies of related parts and components, the war in Ukraine and lockdown measures in China.

While moving forward to sustain long-term business growth based on its core management concepts that focus on innovation, harmony, and transcending, Compal has also invested boldly to advance its manufacturing technology for sustainable development.

Compal will also strive to gear up shipments of its new portfolios for automotive, 5G and server applications, despite some challenges looming ahead, such as labor and material shortages, war, inflation, and a resurgence of the pandemic, Wong said.

Quanta also achieved a milestone in 2021, with its revenues hitting a new high of NT$1.12 trillion, increasing 3.53% from a year earlier. It also saw its notebook shipments expand 25.9% on-year to 75.3 million units in 2021.

But Quanta faces a more significant challenge in 2022. The shipment momentum of Chromebooks, one of Quanta's major export items, has weakened since the second half of 2021, and yet there is no sign of a pick-up in the near term.

Secondly, the lockdown measures initiated in Shanghai to contain the spread of the COVID-19 variant has persisted from April to May. Although the restrictive measures have been gradually removed, Quanta's plant in Songjiang, Shanghai, still suffers from low utilization rates.

Quanta expects its notebook shipments to suffer a sequential 20% decline in the second quarter of 2022, the most conservative estimation from the top-four ODMs, highlighting the impacts of the lockdown measures in Shanghai.

Quanta vice chairman CC Liang has pointed out that the restrictive measures in Shanghai have also affected the supply chains in Kunshan, undermining the supplies of semiconductors, chassis, and other plastics parts and making operation resumption difficult there. He added that factories affected by the disruption could only initially resume up to 30-50% of their capacities.

The lockdowns will affect revenues and push up the production cost of ODMs, including labor and logistics costs, Liang commented. Quanta has prioritized to resume to operations in Shanghai and is not sure whether it could pass the increased cost on to its clients.

However, company chairman Barry Lam remains confident about Quanta's future development, saying that a series of operation optimization programs initiated in recent years has helped it improve product mix, supply chain management, and production cost.

Looking forward to the next 10 years, Lam believes that an in-depth integration of computing and connectivity technologies will usher in a golden era of innovative applications. Quanta is ready to face the new opportunity and challenges that the so-called metaverse computing era will bring.

Wistron garnered revenues of NT$861.15 billion in 2021, up 1.91% from a year earlier, driven by increased shipments of notebooks, monitors, smart devices, and other business-use products.

Compared with Quanta and Compal, whose operations were severely affected by the city-lockdown measures in eastern China in April, Wistron's operations in China were less impacted as its main production sites for notebooks and servers are situated in Chongqing and Guangdong.

Wistron has said that it will focus on optimizing its global deployment, developing new technologies and products, and venturing into new businesses to improve its competitiveness.

It will also deepen its digital transformation processes and improve its ESG visibility while upholding a vision for innovation and sustainability as it moves into a new decade.

About ASC 100:

Asia Supply Chain 100 (ASC100) 2022 ranks the top 100 Asian tech companies, focusing on electronics, information & communication technology, machinery, and automobile industries, by their revenue in 2021. The top 100 companies were able to manage uncertainties and succeed. Based on the rankings, DIGITIMES Asia also summed up the findings and insights in a series of articles.