Notebook Manufacturers Running Low on Parts

The mobile computing market segment is increasing more rapidly than even the most optimistic analyst dreamed possible. On one hand, this is very good news for notebook manufacturers and vendors, but on the other hand it means that supplies of key components are running low, while hardware producing companies are struggling to speed up the pace. What is very good news for manufacturers and vendors is less than thrilling for most potential buyers as the likelihood of discount deals and lower global prices becomes more remote with each day that passes.

"What normally happens during a component shortage is that PC vendors will adjust the makeup of the notebook PC to find savings elsewhere and ensure a constant price for users. For example, using less DRAM (dynamic RAM) memory in a laptop can reduce the cost a tad, to make up for a higher priced laptop battery," according to the news site InfoWorld. This normally works well for the vendors and manufacturers and even if the users are getting an overall poorer performance machine, at least they can buy one, but now as the shortages affect several critical hardware components, that approach no longer works.

An analyst at the research company Goldman Sachs, Henry King, wrote that "We believe third-quarter notebook shipments could be better than our forecast as long as the component supply is sufficient", as the company raised the shipments "forecast to 77.9 million units from a previous estimate of 76.2 million". What the manufacturing companies are facing at a global level is a shortage of LCD panels, but the supplies of power packs and hard disk drives already are low for most smaller vendors. The current laptop battery shortage was at least in part triggered by the recall of 10 million Sony made power packs, company the produced smaller amount of parts this year. A spokesperson from "Taiwan's Simplo Technology Co., the largest independent notebook battery maker in the world," said that his company has been able to provide enough supplies to all existing customers, but can not accept orders from new clients as it already runs at full capacity.

Hewlett-Packard, the number one PC vendor, believes it won't be affected by any shortages. "HP has long term contracts with suppliers, so we won't have any trouble," said Dennis Chen, vice president and general manager of HP's personal systems group, on the sidelines of a news conference in Taipei. Big and well established companies like HP and Dell are less affected by such hardware parts shortages because their orders have a higher priority from the suppliers point of view than the smaller companies that place only infrequent orders. Another laptop producer, Quanta Computer, also said that it does not expect any problems with its supply chain as it has close relations with the vast majority of the parts producers and suppliers.