Hewlett-Packard (HP) has recently turned to seek component supplies from China-based makers in order to cut costs and continue staying competitive in the PC market, according to sources from the upstream supply chain.

The sources pointed out that HP's purchases from China-based component suppliers is expected to expand in the next 1-2 years and facing China makers' strong advantages in cost, Taiwan-based makers may be in danger of being replaced.

In addition to HP, Lenovo's plans to increase its branded handset and PC in-house production rates to 50% within the next 1-2 years are also expected to seriously impact Taiwan-based component makers.

Although Taiwan-based component makers used to have advantages in manufacturing and logistics management, China-based makers are gradually catching up, significantly shrinking the gap with Taiwan makers. As a result, first-tier brand vendors have started turning to partner with China makers to lower their costs.

By: DocMemory
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