Recently HP announced a massive change in it’s business strategy by cancelling its webOS hardware business and announced it’s intention to spin off it’s PC business, much like what IBM did 5 years earlier. In view of HP spinning off the PC business, lots of rumors are coming from the supply chain now, that Samsung is a prospective buyer of HP’s PC business.
DigiTimes, the supply chain tabloid, reports that Samsung is preparing to outsource a part of its notebook production to Taiwan OEM manufacturers like Compal,Quanta and Pegatron. They say this is an intended move to increase capacity so that there is enough bandwidth to acquire the huge PC business from HP.
This is what the Digitimes folks have to say about this :
The sources pointed that the Taiwan’s notebook OEM industry’s production efficiency and cost control is currently unmatched worldwide; therefore, if Samsung takes over HP’s PC department, HP’s over 40 million PC shipment volume will still need to depend on Taiwan OEMs. However, related suppliers of components such as panel, memory and battery may be affected as Samsung has a rather strong vertical integration supply chain.
Within HP’s 40 million units of PC orders in 2011, Quanta will ship 20 million units with Foxconn Electronics (Hon Hai Precision Industry) to ship eight million units, Inventec, seven million units, Wistron, 3-4 million units and Compal, two million units.
The sources pointed out that if HP’s PC business is sold to other brand players, makers such as Quanta, Foxconn and Inventec are expected to see the most impact as they have higher order proportions with HP, while Wistron and Compal are expected to benefit.
Commenting on the event, Quanta pointed out that since the information is still limited, the company can only monitor the outcome carefully; however, since the new PC orders from HP for 2012 are all already set, it is unlikely to have significant changes. However, if Samsung takes down HP’s 40 million units of PC shipments and with Samsung’s own 10 million units, the company will need to ship 50-60 million units totally in one year and will definitely need to find OEM partners as Samsung itself may have difficulty to make all these orders, Quanta noted.
However, Quanta will continue to work on cloud computing and the related products in the future to increase its non-notebook business’ contribution.
Meanwhile, Inventec pointed out that HP’s announcement seems like is for testing the market’s reaction and believes that whether HP will sell the business will still depend on the market’s feedbacks. In addition, since HP is given up its PC business because of the weak profitability of consumer notebooks, Inventec, which is manufacturing mainly HP’s enterprise notebooks, expects to only see a limited impact from the event.
Overall looks good for Samsung which is poised to become the top PC manufacturer if it acquires HP’s PC business.