Compal Electronics Inc (仁寶), the world’s biggest contract notebook computer maker, said yesterday it is in talks with local governments in China about expanding its electronics manufacturing lines to Sichuan Province, joining rivals in relocating factories to better serve customers.
In a filing with the Taiwan Stock Exchange, company spokesman Gary Lu (呂清雄) said the “company is negotiating with Sichuan and Chengdu governments over a future investment. We are -planning to manufacture information technology and other electronic products there.”
Compal did not disclose financial details because the investment plan would be subject to the company board’s approval, according to the statement.
Compal had previously declined to expand its production lines outside of its Chinese manufacturing hub in Kunshan, Jiangsu Province.
Compal chairman Rock Hsu (許勝雄) said earlier this year that the company would not move manufacturing sites to China’s interior unless there were supply requests from customers there. Lower labor wages, compared with coastal provinces, would not be a major concern for factory relocation, he said.
However, the company is facing increasing pressure from other Taiwanese contract makers such as Quanta Computer Inc (廣達), Hon Hai Precision Industries Inc (鴻海) and Inventec Corp (英業達) that are making Chongqing, Sichuan Province, their manufacturing center to lower costs and meet customer demands.
The Chinese-language -Economic Daily News reported yesterday that Compal planned to invest more than US$500 million in a new production line in Chengdu.
The production line will manufacture notebook computers, all-in-one computers, LCD monitors and flat-screen TVs, aiming to better serve major customers like Dell Inc, Acer Inc (宏碁) and Lenovo Group Ltd (聯想).
The -Economic Daily News said that Compal planned to produce 10 million laptops by the end of next year at the site and increase its capacity to 20 million at the end of 2013.