Flextronics Challenges Hon Hai in Shipments of Notebooks

Flextronics International, the world`s leading provider of electronics manufacturing services, is set to take on rival Hon Hai Precision Industry in notebook PCs.

Flextronics recently pledged that it would secure a 3 percent world market share in shipments of notebooks this year, compared to 2 percent last year. Based on the projection, the company will have to ship six million notebooks this year, triple that of the preceding year. The projected shipments will be equivalent to that of Hon Hai.

Hon Hai noted it churned out three million notebooks on the OEM basis last year and the amount will grow to reach between six million and seven million this year. If the contract production of Apple Computer`s iPad is calculated, the company will see shipments of notebooks reach 16 million units this year.

With the acquisition of the computer unit of Arima Computer Corp in March 2008, Flextronics has been making all-out efforts to forge its own team to focus on contract production of notebooks.

To facilitate the influx of orders, Flextronics will add 500 engineers. By the end of this year, the company will see the number of in-house engineers reach 1.200.

An industry insider said the involvement of Flextronics in the notebook production arena has lead to a mounting pressure on such rival contract manufacturers as Quanta Computer Inc, Compal Electronics Corp, Wistron Corp and Inventec Corp.

Flextronics landed orders of eight models of notebooks last year, mainly coming from such big names as Hewlett Packard and Dell Computer. At the end of last year, the company added Lenovo onto its notebook client list.

To facilitate the orders from Lenovo, Flextronics set up a personal computer plant in Hungary which has begun mass production in December last year. The new plant mainly contract-manufactures notebooks, desktop PCs and servers for Lenovo. Flextronics noted it would vie for orders for all-in-one PCs from Lenovo.

With its notebook production base located in Wujiang of Jiangsu province, China, Flextronics is considering setting up a new plant in China to facilitate the expansion in production. The proposed new plant is expected to begin mass production in October this year.

Flextronics scored $6.6 billion in sales in the third quarter of last year, up 12 percent from the preceding quarter. The company`s net income reached $138 million, or $0.13 in earnings per share, last year.

Source: CENS