Taiwan-based notebook keyboard maker Chicony Electronics expects its consolidated revenues in the fourth quarter of 2010 to remain flat sequentially compared to the third quarter's NT$15.77 billion (US$523.58 million), according to company vice chairman and president Mao-kuei Lin.
Chicony originally expected its fourth-quarter consolidated revenues to grow 5-10% sequentially, but as its notebook clients are currently still holding high levels of component inventories, the reduced orders have directly impacted the company's performance in the fourth quarter, Lin pointed out.
As for other product lines, Lin expects the increasing demand for Microsoft's Xbox 360 because of the newly launched Kinect, will benefit Chicony significantly in 2011 since the company is the power supply unit provider of the games console, while its subsidiary Newmax Technology is the camera module supplier for Kinect.
Commenting on rumors that notebook keyboard makers have been seeing labor shortages recently, Lin confirmed the rumors and pointed out that the company has already shifted some orders for the first quarter of 2011 to production in the fourth quarter of 2010.
Lin believes that the notebook supply chain at the coastal areas (eastern) of China will see the most serious labor shortages in 2011 since most workers originally come from western China and have moved to eastern China for working purposes, but as most supply chain players have begun to set up production sites in western China, these employees may decide to return to western China to work, leaving factories in coastal areas face a crisis hiring new employees.
In addition, Foxconn Electronics' (Hon Hai Precision Industry's) move to increase salaries is also impacting smaller component makers' hiring process as these makers are unable to offer a similar package to Foxconn, while rising living standards in coastal areas are also causing most younger generation workers to be unwilling to find a job in a labor-intensive environments such as the IT industry, Lin added.
Although Lin attended the ceremony for the signing of Acer and the Chongqing government's investment contract, Chicony is currently still evaluating which city in which it will establish its plants, and may even establish plants in two cities.