Aaron Lee, Taipei; Joseph Tsai

 

Lenovo and Compal Electronics' joint venture in Anhui, China is set to start volume production at the end of 2012, mainly manufacturing notebooks and all-in-one PCs with the plant's annual capacity expected to reach 10 million units, according to market watchers.

The market watchers pointed out that the two firms' cooperation is expected to attract related upstream suppliers to establish plants and form a cluster in the area.

With over 90% of the world's notebooks being manufactured by Taiwan's top-5 ODMs, and China-based players having difficulties cutting into the industry, the market watchers believe that Lenovo is trying to strengthen China-based upstream suppliers' capabilities through the joint venture with Compal.

While US and Europe brands mostly outsource their PC production, Lenovo's strategy means not just better control over the manufacturing process, but also a stronger presence in the ODM industry.