Amazon has reduced tablet orders released to Taiwan-based ODMs Compal Electronics and Quanta Computer by an estimated 30%, according to a Chinese-language Economic Daily News(EDN) report citing Taiwan-based supply chain makers as indicating.
Google is planning to push 2-in-1 devices in 2015, according Digitimes Research’s inquiries within the upstream supply chain. Google’s 2-in-1 Chromebook designed by Quanta Computer is expected to be completed by the end of the first quarter. The device features a detachable form factor and runs Android in the tablet form and Chrome when attached to a keyboard.
Notebook ODM Quanta Computer has been competing for server ODM orders from Dell, according to industry sources. Quanta Computer was originally a server ODM for Dell and NEC but has shifted the focus of its server business from ODM to white-box production for direct shipments to clients setting up cloud computing data centers including Google, Facebook, Amazon and Microsoft.
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.
Although China is currently seeing strong demand for cloud computing data centers, Taiwan-based Quanta Computer and Wiwynn, a server brand subsidiary of Wistron are not in a hurry to strive for related orders and will continue to devote their efforts to meeting demand from clients in Europe and North America because China-based server players such as Inspur and Sugon have been competing for orders with cheap solutions, according to sources from the server supply chain.
Taiwan-based ODM Quanta Computer has begun volume production of the new 12-inch MacBook Air, paving the way for Apple to launch the device in the first quarter of 2015, according to sources at Taiwan-based supply chain. Quanta has stepped up efforts to recruit more workers in order to ramp up the production, revealed the sources.
Taiwan-based notebook ODM Quanta Computer, in view of large potential demand for servers used in cloud computing data centers in Europe and North America, will set up a server factory in Germany, while Wiwynn, ODM Wistron’s subsidiary specifically responsible for producing and marketing servers, will do so in Mexico and Czech, according to Taiwan-based supply chain makers.
Taiwan-based notebook ODM Quanta Computer and Wiwynn, Taiwan-based ODM Wistron’s subsidiary specifically responsible for direct-account (white-box) sale of servers, are expected to see direct-account shipments of servers in 2015 significantly increase on year mainly due to fast growing demand for use in Internet data centers, according to Taiwan-based supply chain makers.
Wistron’s white-box server subsidiary Wiwynn and Quanta Computer are expected to achieve their server business goals for 2014, but in anticipation of growing competition in the server market in 2015, the two players have already stepped up efforts looking to expand their shipments, according to sources from the upstream supply chain.
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.
With Internet of things (IoT) applications growing popular, many Taiwan-based ODMs and EMS providers are planning to establish fund-raising platforms to attract partnerships with designers worldwide, according to sources from the upstream supply chain. Foxconn Electronics (Hon Hai Precision Industry) established the kick2real website in April, while Quanta Computer is also considering establishing a similar platform.
As large retail chains including Walmart, Best Buy and Target plan to set up data centers to operate e-commerce, server makers Quanta Computer and Wiwynn are looking to land orders based on their lower prices compared to brand vendors’ quotes, according to industry sources. The sources pointed out that the retail chains have all been aggressively expanding their e-commerce business coverage, especially Walmart, which is seeing its sales from the e-commerce segment grow rapidly and is gradually becoming a threat to Amazon.
Commenting on the Internet of things (IoT) business opportunities, Quanta Computer CTO Ted Chang said the industry in still at the initial stage of development, but the business will grow rapidly since it is not about hardware specification breakthroughs, but whether applications are able to satisfy consumer demand. In the future, Quanta will focus on healthcare and medical applications for the IoT business.
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.
Quanta Computer has announced third-quarter results with operating profits reaching NT$11 billion (US$359.31 million), up 3.97% sequentially and EPS at NT$1.23; however, the company’s operating gross margin dropped to only 4.5%, down from 4.93% in the second quarter, because of an increase in the company’s operating expenses.
Quanta Computer has reported consolidated revenues of NT$81.983 billion (US$2.73 billion) for October 2014, representing a 3.72% drop on month and 4.36% increase on year. The company has totaled NT$756.654 billion in year-to-date revenues, up 10.07% compared with the same time last year. For the year of 2013, Quanta Computer totaled NT$880.402 billion in consolidated revenues, down 14.11% sequentially on year.
Quanta Computer reportedly has received new orders from Google for servers recently and will start supplying in the first quarter of 2015, according to industry sources. Quanta declined to comment on its orders. Quanta had been the sole server supplier for Google’s databank center before the search engine company switched about 80% of its orders to Inventec in the second half of 2014. Quanta’s new server orders are likely to account for 50% of Google’s total purchases of servers in early 2015, the sources estimated.
Project Ara, Google’s development plan for modular smartphones, is expected to become available on the market in 2015 with Quanta Computer reportedly being the main hardware supplier. Orders are expected to boost the Taiwan-based ODM’s non-notebook revenues, according to sources from the upstream supply chain. Quanta declined to comment about its clients or orders.
Quanta Computer has reported consolidated revenues of NT$85.155 billion (US$2.84 billion) for September 2014, representing a 4.8% increase on month and 11.84% increase on year. The company has totaled NT$674.671 billion in year-to-date revenues, up 10.81% compared with the same time last year. For the year of 2013, Quanta Computer totaled NT$880.402 billion in consolidated revenues, down 14.11% sequentially and down 0.46% on year.
As demand for data center hardware in Europe has started growing strong recently, server players including Hewlett-Packard (HP), Dell and Quanta Computer have been aggressively investing resources in the market, looking to land orders, according to sources from the upstream supply chain. The sources pointed out that most Internet service players such as Google, Facebook, Amazon and Microsoft used to offer their services mainly in North America, making the region the focus of server players.