Compal raising prices to offset high cost of components - Taipei Times
Mon, Jun 25, 2018 - Page 16 News List

Compal raising prices to offset high cost of components

By Chen Cheng-hui  /  Staff reporter

Compal Electronics Inc (仁寶), one of the nation’s leading contract notebook computer manufacturers, said it plans to raise manufacturing prices in the third quarter to help absorb passive component price hikes.

Apart from making laptop computers, Compal has diversified product lines across the PC, smartphone, tablet and LCD TV segments for a number of brand vendors.

The company is negotiating with its brand customers to raise manufacturing prices, as the supply shortage in passive components, especially multilayer ceramic capacitors, is likely to continue until the end of this year, Compal president Ray Chen (陳瑞聰) said after the company’s annual general meeting on Friday last week.

Supplies from passive-component makers at the moment would only allow Compal to meet about 60 percent of orders placed by its customers, Chen said, adding that to fulfill the remaining orders, the company would need to buy more components on the spot market at inflated prices, Chen said.

Already facing slim margins in contract manufacturing, Compal is finding it increasingly difficult to absorb rising manufacturing costs for its customers, Chen said.

Most clients have agreed to the company’s price hikes, beginning from next quarter, he added.

Industry analysts have said they expect further price increases for passive components — such as resistors, capacitors and inductors — in the near future, as an imbalance in the supply and demand of these key electronic parts, which are used in a wide range of electronic devices, might extend into next year.

However, contract electronics maker Inventec Corp (英業達) said it has no plans to raise manufacturing prices, while Quanta Computer Inc (廣達), Wistron Corp (緯創) and Pegatron Corp (和碩) declined to comment on the issue, the Chinese-language Economic Daily News reported on Friday.

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