Taiwan's Market Intelligence Center (MIC) estimates global shipment of complete PC systems at a conservative 163 million units in 2004. Of this number, 35.4 million units were estimated to be in barebone form: 15.7 million units of notebook PCs, 17.5 million units of desktop PCs and 2.17 million units of small form factor PCs.
The increasing demand for media center PCs and the emerging trend toward upgradable gaming and multimedia home systems are sustaining the barebone PC industry in Taiwan and mainland China.
In order to better understand the largely undocumented barebone segment of the PC industry, Global Sources interviewed 28 barebone PC manufacturers in mainland China and Taiwan, and visited the factories of 20 of them. The 28 represent at least 60 percent of the PC manufacturers in mainland China and Taiwan. Together, they account for an estimated 64 percent of the global shipment of barebone PC units in 2004.
The following industry highlights were derived from data provided by these suppliers:
Production Centers
• About 60 percent of barebone PC manufacturers have factories in the Guangdong cities of Shenzhen, Dongguan, Zhuhai, Shunde, Foshan, Zhongshan, Huizhou and Guangzhou.
• Ninety-five percent of barebone PCs manufactured in mainland China comes from Guangdong based factories.
• Majority of Guangdong-based barebone PC manufacturers focus on product assembly, and outsource PCB making, mold development and plastic injection to a rich local base of support industries.
• Guangdong is host to many manufacturers of computer mice, keyboards, cases, power supplies, speakers and monitors that supply the barebone PC industry.
Production Capability
• Both mainland China and Taiwan manufacturers concentrate on R&D and QC. Key manufacturing processes such as SMT, PCB, mold making and plastic injection are generally outsourced.
• Mainland China manufacturers have a combined monthly capacity of 1.99 million units, but only an average of 50 percent, or 981,000 units, is utilized.
• Taiwan manufacturers have a combined monthly capacity of 1.13 million units a month and a monthly output of 913,000 units. The average used capacity is 81 percent.
Industry Overview
Taiwan's Market Intelligence Center (MIC) projects global shipments of notebook and desktop PCs to reach 55 million and 125.3 million units, respectively, in 2005. These figures are higher by 19.3 percent for notebook PCs and 7.2 percent for desktop PCs over estimated 2004 global shipments.
Gartner Inc. forecasts higher global PC shipments of 199 million units in 2005. The market research firm projects notebook PC shipments to drive market growth, rising by 17.4 percent in 2005. Desktop PC shipments are forecast to grow by 6.1 percent.
These statistics reflect complete systems only. Global shipments of barebone notebook and desktop PCs is largely undocumented.
For notebook PCs, barebone units have traditionally occupied a large percentage of makers' output.
The past few years, however, have seen the percentage of barebone notebook PC shipments fall. In 2002, barebone notebook PCs accounted for 50 percent of total shipments. This decreased to 38.8 percent in 2003.
In 2004, the MIC estimated that only 34.1 percent of Taiwan makers' notebook PC output was barebone units. For small form factor PCs, Gartner estimates output will grow from 1.2 million units in 2003 to 32.1 million units in 2008. By 2008, Gartner expects small form factor PCs to account for 20 percent to 25 percent of total desktop PC shipments.
The MIC estimates that 2.29 million small form factor PCs were produced in 2004, a 38.4-percent year-on-year (YoY) growth. Ninety-five percent of the output of small form factor PCs in Taiwan were delivered as barebone units.
In the absence of industry statistics on barebone PC shipments, data derived from information provided by respondents in this report indicate about 64 percent of global barebone PC shipments came from suppliers in mainland China and Taiwan.
Taiwan is a major manufacturing base for PC-related products. There are an estimated 17 to 20 makers of notebook PCs, 10 makers of desktop PCs, and 10 makers of small form factor PCs. Most makers ship complete PC systems to large OEM and ODM buyers, such as HP, Compaq, IBM, Fujitsu and NEC. All makers also accept barebone orders.
Supplier Profile
AOpen Inc.
AOpen, a member of the Wistron Group, was established in 1992. It manufactures complete PC solutions, and barebone systems. The company started to produce barebone systems in 1992. Its barebone products include notebook PCs, desktop PCs and small form factor (SFF) PCs.
AOpen has been listed in the Taiwan Stock Exchange since 2002. Its total sales reached US$555 million in 2003 and US$485.7 million in 2004. It has an annual output of 200,000 barebone systems, with sales reaching US$158.7 million in 2004.
Desktop PCs comprise 35 percent of the total output, SFF PCs account for 15 percent, and notebook PCs take up 50 percent.
AOpen has branches in Japan, California, Shanghai, the Netherlands, Germany, and Russia. It has also established alliances in Brazil and India to strengthen its export market.
Ninety-four percent of the barebone PC output is exported mainly to Europe, North America and Asia Pacific. Western Europe accounts for 35 percent of the shipments, North America accounts for 27 percent and Asia Pacific takes 38 percent.
One of AOpen's computer cases was chosen for Intel's BTX structure reference kit for a future digital home framework. It was also awarded as the top white box model by CRN in 2003. In October 2003, the company was given China's Integrated Management System Certificate, which incorporates CQMI ISO 9001, ISO 14001 and OHSAS 18001 certifications.
Manufacturing Capability
AOpen has a total of 2,500 employees worldwide, with majority working in its manufacturing facilities in Taoyuan, Taiwan and Zhongshan, Guangdong. The two factories comply with ISO 9001, ISO 9002, ISO 14001 and OHSAS standards. It can manufacture 2 million computer components and peripherals a month.
The company's Longtan factory in Taoyuan produces motherboards, optical devices and wireless modules for notebook PCs and printers. The factory also supports board-level assembly with lead-free production and high-precision laser assembly. The Longtan factory focuses mainly on assembly, pilot tests and flexible production of value-added products.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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