Building (Most of) the World's Notebooks

Most Taiwanese notebook PC makers are small to midsize companies that do not sell products with their own logo except in niche markets. Instead, they have become manufacturing and design centers for foreign notebook PC suppliers, including the who's who of computer companies: Apple, Compaq, Hewlett-Packard, IBM, NEC, Texas Instruments, and others.

Most foreign notebook computer companies have come to Taiwan to take advantage of the island's fast and flexible manufacturing expertise in this area, according to Horace Tsiang, CEO of First International Computer. "In general, Taiwan has a very strong infrastructure for manufacturing notebooks, including a strong base of enginee ring talent and close component-supplier relationships. As a result, product cycle times are very short here, and we can quickly ramp up production," Tsiang explains.

Taiwan's notebook PC companies offer two basic manufacturing services for foreign system houses: They can build products either on an OEM or ODM (original design manufacturer) basis. In an OEM deal, a systems house can take a notebook PC from a local vendor and put its own logo on the machines for resale. Another OEM scenario involves a local company building a system according to a customer's design. In an ODM deal, a systems house gives a local company a set of product ideas or concepts. The local company, in turn, will design, source components, and build a product according to the specified concepts.