Taiwan’s Inventec, one of the world’s largest contract laptop makers, is taking steps to expand its cloud business unit this year to cash in on the emerging Internet of Things (IoT) market. Inventec chairman Richard Lee said after a meeting with shareholders that the company will restructure its cloud business department into an “IoT and cloud business group” starting this year, with the plan to be formally announced at a later date.
The third version of China’s data center server technology standard project led by China-based Baidu, Alibaba and Tencent are set to be announced at the end of 2015 and the project will cover more standards and adopt a modularized design to help reduce China data centers’ server purchasing costs, according to sources from the upstream supply chain. China launched the first version of the project in 2012 and the second in 2014 and the project is rather similar to the Open Compute Project (OCP) that Facebook has been aggressively promoting.
Inventec is considering setting up factories in Japan and Singapore in 2015, according to company chairman Richard Lee. Japan-based clients, due to depreciation of the Japanese yen against the US dollar, have recently asked Inventec to set up assembly lines locally, Lee indicated. In view of business opportunities arising from the 2020 Olympic Games to take place in Tokyo, it is necessary to set up a factory for assembling products in Japan, Lee said.
In addition to India, Inventec is also planning to establish plants in Southeast Asia and Japan for server production, mainly to serve its clients’ demand, according to company chairman Richard Lee. Inventec’s main server clients are Hewlett-Packard (HP) and Dell, bu the ODM has seen the majority of server orders come from HP, which has made aggressive moves in the server market.
Xiaomi Technology is currently in talks with its Taiwan-based production partners Foxconn Electronics and Inventec for the possibility of jointly setting up a smartphone plant in India, according to Xiaomi’s co-founder and president Lin Bin. The establishment of a production base in India will be instrumental to Xiaomi’s future growth as the India government is currently promoting the production of industrial products in India, Lin noted.
Inventec plans to set up production lines at a leased factory in Chennai, southern India, with production to begin at the end of the second or beginning of the third quarter of 2015, according to the company. While Inventec is reluctant to reveal what kinds of products it intends to produce at the Chennai factory, the production lines are likely to roll out smartphones and other devices for China-based Xiaomi Technology initially, according to industry watchers.
Notebook ODM Inventec has established an innovation incubation fund and aims to invest in 20 innovation teams in 2015, according to company chairman Richard Lee. The fund has NT$30 million (US$945,000) in the first phase, and 10 of the planned 20 teams will be selected from finalists at an innovation competition to be held by the Cloud Computing Association in Taiwan (CCAT) for which Lee is president.
Optimistic about software defined network (SDN) development, Facebook is planning to shift its network switch orders from existing brand partners to Taiwan’s white-box suppliers in 2015 and both Quanta Computer and Wiwynn, a white-box server subsidiary of Wistron, are already preparing aggressively to strive for related orders.
Taiwan-based notebook ODM Inventec, in order to reduce impact of continued wage hikes and tight supply of labor, started trial automation of production lines at factories in Shanghai, eastern China, in late November 2014 and expects to decrease labor input by 30% when the first phase of trial automation is completed at the end of the first quarter of 2015.
Notebook ODM Wistron will set up a software R&D center with 200 engineers initially in southern Taiwan, while fellow maker Quanta Computer will expand software R&D manpower to support production of data center servers to compete for orders for setting up private or private/public hybrid cloud computing platforms, according to the companies. Inventec will also expand R&D center by recruiting 1,000 software engineers in 2015.
Taiwan-based server ODMs have been aggressively expanding their services worldwide. Quanta Computer’s server centers in Japan, and in China’s Hangzhou and Beijing have recently started operating, while its office in Germany will also begin operation by the end of 2014. Inventec is also set to establish a cloud computing server center in Europe to better serve its clients in the region.
In May 2014, Alibaba led messaging app Tango’s $280M financing round, during a period when the mobile messaging space saw giant movements with acquisitions from Facebook (Whatsapp) and Rakuten (Viber) also hitting the headlines. It’s apparent that Alibaba didn’t want to miss out. It has been trying hard to push its own Laiwang app, but has had little success.
Inventec is talking with Microsoft about cooperation to integrate Microsoft-developed cloud computing software with Inventec hardware to launch related services in 2015, with target users to be small-to-medium-size enterprises in Taiwan and China, according to the company, adding that Inventec is setting up a data center in Taipei which, in addition to its in-house needs, will host an extra 20 server racks available for outside users.
Notebook ODM Inventec saw consolidated revenues for the third quarter of 2014 decrease on quarter and on year mainly due to shrinking shipments of notebooks, and hopes that non-notebook product lines, including AIO (all-in-one) PCs, tablets, servers and hand-held devices, will drive business growth in 2015, the company said at an investors conference on November 7. Inventec has received fewer ODM orders for consumer notebooks to be shipped in 2015 from Hewlett-Packard and Toshiba, the company said.
Inventec has released its financial report for the second quarter of 2014, recording consolidated revenues of NT$104.9 (US$3.5 billion), gross margin of 5.3%, net operating profit of NT$1.68 billion, net profit of NT$1.48 billion and net EPS of NT$0.41. Commenting on the reduced profits in the second quarter compared to the first, Inventec pointed out that the drop mainly resulted from exchange losses, but the company’s gross margin in the second quarter was better than the first and is expected to stay at around the same level in the second half.
Inventec expects 2-digit on-year growth in ODM server shipments in 2014 and more than 10% on-year growth in the corresponding revenue, the company said at a May 13 investors conference. Due to declining demand for consumer notebooks, Inventec said its total notebook shipments in first-quarter 2014 slipped sequentially. However, first-quarter shipments of servers, smart handheld devices and PV products all rose significantly, Inventec said.
Wistron and Inventec will begin ODM production of ARM-architecture servers for Hewlett-Packard (HP) in the second half of 2014, according to Taiwan-based supply chain makers. Some component makers will start shipping products for HP’s ARM-based servers in May. Although ARM solutions are unlikely to become an immediate threat to Intel, the sources believe the extra option should provide clients more leverage to bargain for better prices and more resources from Intel.
TAIPEI – Original design manufacturer Inventec Co. yesterday held the company’s earnings conference, reporting earnings-per-share performance of NT$1.97 over the course of 2013. Most notably, net income for the company last year improved by 251 per cent from the previous period, reaching NT$6.209 billion (S$258 million), profit margins of 4.9 per cent. Revenues for the company also saw a 12 per cent year-on-year growth at NT$461.092 billion.
Inventec will launch cloud computing-based storage solutions for SMBs in the Southeast Asia market in the third quarter of 2014 through cooperation with the Taiwan government-sponsored Institute for Information Industry and independent software developers, according to company senior advisor George Wang. In addition to Southeast Asia, Inventec will also extend its reaches to markets such as China, North America and Japan and expects to see some results by the second half of 2014. As for the plan to spin off its cloud computing application business into an independent subsidiary, Wang noted that it is a long-term plan, but the company so far has not yet had a firm schedule for it.