Among notebook supply chain players, Taiwan-based PCB makers have raised quotes slightly to reflect continued increases in material and labor costs, while vendors of new notebook models to be launched in late January 2011 have accepted small increases in quotes by makers of hinges, battery modules, cases, power supplies and connectors, according to Taiwan-based component makers.
Since new notebook models contribute higher profitability, vendors are more willing to accept their upstream component partners' requests for quote increases. However, since the downstream vendors also face pressure over market competition, while overall market demand is not showing obvious growth, the upstream component makers are still unable to shift much of their increasing costs to their downstream partners, the sources noted.
Therefore, components that have been mass shipping for a while are unlikely to see their quotes raised.
In the past, downstream vendors normally would ask their upstream partners to reduce quotes every quarter for their benefit; however, since these kinds of demands have reduced recently, plus shipments of new products will expand, the sources believe their profitability in 2011 will see a strong improvement compared to 2010.