Digi Times — The top-four Taiwan-based notebook ODMs all saw their profits decline significantly in the second quarter of 2015, and it still remains unclear if they can turn around in the second half of the year amid slowing economic growth globally. Wistron, a front-runner in terms of profitability, saw its net profits sink 89.4% sequentially to NT$77 million in the second quarter of 2015. The earnings translated into an EPS of NT$0.03, the lowest quarterly earnings since the third quarter of 2004.
Digi Times — ODM Quanta Computer shipped 4.1 million notebooks in August, increasing 28.1% on month, according to the company. Quanta expects notebook shipments in September to remain unchanged from August, but shipments in October are likely to drop. If September notebook shipments are the same as in August, shipments in the third quarter will be 11.4 million units, growing 6.54% on quarter which is higher than the originally estimated 0-5%, Quanta said.
Digi Times — In the second quarter of 2015, worldwide server shipments grew 8% on year, while revenues increased 7.2% from the second quarter of 2014, according to Gartner. “The second quarter on-year growth for 2015 slowed compared with the annual growth of the first quarter of the year,” said Jeffrey Hewitt, research vice president at Gartner.
Digi Times — Quanta Computer has partnered with Cisco to provide hardware- and software-integrated services to hospitals and clinics. Quanta will combine its QOCA medical platform, which it developed jointly with the Massachusetts Institute of Technology (MIT), with Cisco’s cloud computing solutions and the services have already been adopted by several hospitals in Taiwan and are also targeting the China market.
Digi Times — Quanta Computer’s R&D partnership with the Massachusetts Institute of Technology (MIT) will end in 2015. Quanta has partnered with MIT for 10 years. Quanta Computer has started moving its equipment back from MIT and said that the two’s partnership has already achieved its original goal.
Digi Times — Taiwan-based ODMs will ship an estimated 32.067 million notebooks (not including detachable hybrid models) during the third quarter of 2015, accounting for 81.6% of the global total and increasing 2.4% on quarter but decreasing 12.2% on year, according to Digitimes Research. There will be 39.288 million notebooks shipped globally in the third quarter, growing 2.5% on quarter but slipping 12% on year, Digitimes Research indicated.
Digi Times — China-based ODMs LCFC (Hefei) Electronics Technology and Uniwill Technology are expected to have notebook shipments in 2015 significantly increasing on year, posing increasing competitive pressure on Taiwan-based notebook ODMs, mainly Quanta Computer, Compal Electronics, Wistron and Inventec, according to industry sources in Taiwan.
TAIPEI: Taiwan’s Quanta Computer, the world’s top contract PC manufacturer which makes laptops and assembles watches for Apple, said it is considering establishing a manufacturing base in India. “We’re gathering materials for evaluation. We’re looking into it,” Quanta vice-chairman CC Leung told reporters, after the company’s annual investor conference.
Quanta Computer reportedly is planning to expand its server business software team and will double the existing personnel to 100 by the end of 2015 and double the number again to 200 in 2016 to prepare for entering the enterprise server industry, according to sources from the upstream supply chain. As demand for datacenter establishment from players such as Google, Amazon and Facebook continues rising, these Internet service players have been nurturing white-box server players including Quanta Computer and Wiwynn to reduce costs.
Quanta Computer has become VCE’s exclusive supplier of servers used in its VxRack System, a hyper-converged rack-scale system for private cloud applications unveiled by VCE in early May, according to Taiwan-based supply chain makers. However, Quanta declined to comment on the report. VCE is a joint venture set up by EMC and Cisco Systems mainly for integrating EMC-developed storage equipment, Cisco-developed servers and VMware-developed virtualization software to provide private cloud computing solutions for enterprise users.
Taiwan server players such as Inventec, Mitac International and AIC are optimistic about China’s server market and have been accelerating their expansion into the market, while Quanta Computer is reportedly planning to form a deeper relationship with China-based server vendor Inspur and Wiwynn will start promoting its latest server products in China.
White-box server vendor Quanta Computer has recently started accelerating its private cloud computing solution development, looking to expand its sales in 2016 and the move is expected to directly affect Hewlett-Packard (HP) and Dell. Currently, direct supply to Internet service players already account for over 80% of Quanta’s server shipments.
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.
Quanta Computer has reported consolidated revenues of NT$80.051 billion (US$2.56 billion) for March 2015, representing a 45.51% increase on month and 7.49% increase on year. The company has earned NT$205.193 billion in year-to-date revenues, down 4.93% compared with the same time in 2014. The company’s stock price dropped 0.68% and finished at NT$73.90 in trading on the Taiwan Stock Exchange (TSE) on April 10, 2015.
Quanta Computer has reported 2014 revenues of NT$926.32 billion (US$29.6 billion), up 5.2% from a year ago and EPS of NT$4.90, up from NT$4.84 in 2013. However, in the fourth quarter, despite a growth in gross margins from 4.5% in the third quarter to 4.57%, the company’s operating profit margins were only 1.26%, down from 1.49% of the third quarter because of expenses related to preparations for a new product, the company noted.
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.