Did you know that more than 90% of personal computers are manufactured by Taiwanese manufacturers in Taiwan or located in other countries?
The total number of PCs manufactured through them totals more than 300 units per year (excluding tablets). These Taiwanese manufacturers are called OEM or ODM (original design manufacturer). Only a small percentage of PCs have the OEM’s brand names stamped on them. Since they are manufacturers specializing in services to overseas customers, most of their products are stamped with branded names from companies located overseas.
In the early days, the main business function of Taiwanese manufacturers was to assemble PCs based on the designs from other manufacturers. They purchase materials and components from overseas suppliers because there were no reliable suppliers in Taiwan. Their purchases included semiconductors, display panels, passive components, optical components, mechanical components, disc drives, keyboards, printed circuit boards, various cables and more. There was significant amount of entrepreneurial progresses over the last twenty years and many new venture companies began production for these components and materials.
Nowadays, Taiwanese PC manufacturers can procure all kinds of materials and components in Taiwan. These domestic suppliers transitioned to developing manufacturing and assembling equipment. Some of the Taiwanese PC manufacturers now design their own PC products.
The manufacturing segment for PCs is a huge industry in Taiwan. However, most manufacturers are happy to play the role of a subcontractor for overseas companies. The Taiwanese PC manufacturers are very sensitive to global market trends and tie their investment and employment plans to them. They do not trust data provided by market research companies, and forecast their own sales based on customer relations from a world wide market. The component suppliers and material suppliers forecast their business the same as the PC manufacturers. They know their positions in the supply chain for the PC industry, and try to predict business trends from their customers throughout their network. The forecast is not only relying on numerical data, but also the customer the information came from, the model number of the product, when the busy season will begin and end, and how any external factors will contribute to a slowdown or a spike in sales. Accordingly, their forecasts are quite accurate.
These forecasts were extremely accurate over the last two years. Taiwanese manufacturers forecasted a slow down for the global PC market in 2013 and they expected the notebook PC market would have strong growth in wake of strong demand from tablet PCs and smartphones (they were correct). They predicted the downward trend for PCs will continue during the first half, and would show some rebound in the third quarter (correct again). Unfortunately, some Taiwanese manufacturers are forecasting a further slowdown for the PC market during the fourth quarter and through all of 2015. This time around, they expect the tablet PC market will also slow.
Does it mean the entire electronics industry will slow for a while? Some believe that when the PC industry sneezes, the rest of the electronics industry catches a cold.
DKN Research, www.dknresearchllc.com
DKN Research Newsletter #1432, Nov. 2, 2014 (English Edition)
(Micro Electronics & Packaging, www.dknresearchllc.com)
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Headlines of the Week
1. Sony commercialized a new color CMOS image sensor with a high sensitivity for automobiles. It works in a dark places.
2. Hitachi developed a memory technology in quartz glass. It holds digital data more than 2 hr. under 1000C environment with the same density as Blue Ray system.
3. Mitsubishi Plastic founded a manufacturing & distribution company in Australia. The company will produce high quality vegetables in clean solar houses.
4. JST developed a magnetic compound NdFe12Nx for electric motors of hybrid cars. The new magnet does not need remarkable amounts of rare earth.
5. Sumitomo Metal Mining decided to more than double manufacturing capacity of NiLi based cathode material of the secondary batteries.
6. Hitachi Metals developed a sensor that measures 3D angular velocity using a piezo film for mobile devices and automobile devices.
7. Mitsubishi Materials established a volume production process for the PZT piezo films used in MEMS device constructions.
8. Murata commercialized a new quartz device with 2016 and 1612 plastic packages for mobile equipment. The new devices provide higher accuracy in smaller packages.
9. Fujitsu agreed to work with FPT International in Vietnam to develop high tech agriculture systems.
10. Olympus developed a new measuring microscope “STM7” with an accuracy of 3 micron for the productive process control.
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