Computer case supply is booming in mainland China. More than 100 companies manufacture PC cases, with about 30 to 40 makers capable of filling customized, big-volume export orders. New makers continue to enter this line.
Leading suppliers are domestic-oriented companies with strong brand recognition, followed by export-oriented players whose only products are PC cases and who concentrate on OEM business. These two groups possess the manufacturing experience, maturity, marketing savvy and readiness to satisfy the sourcing requirements of global PC case buyers.
A projected 32 million PC cases will be produced in mainland China in 2004, 60 percent of which are expected to be delivered to overseas buyers.
Pitted against the mainland's homegrown suppliers are transplanted PC case manufacturers from Taiwan, who have clustered mainly in the Guangdong cities of Dongguan and Shenzhen, and in the provinces of Zhejiang, Jiangsu and Shanghai.
These Taiwan-originated companies are among the global industry leaders with monthly production capacities exceeding 1 million units and whose OEM clients include Toshiba, NEC, Hewlett-Packard, Sanyo and Wal-Mart.
Their business mode is high-volume and export-oriented. Backed by many years of manufacturing experience, Taiwan's PC case makers boast more sophisticated R&D capability and more reliable QC/QA systems than their counterparts from the mainland. Moving production to the mainland enabled Taiwan makers to cut off US$2 to US$3 from the costs of each finished unit.
Competition, however, is not the only predicament of suppliers. A more acute issue is the high cost of steel and plastic, which account for 70 percent to 80 percent of a PC case's cost. Supply of steel and plastic began to tighten in 2003, and this situation is projected to last till 2005, possibly even longer.
Most makers' responses have been to absorb the added costs and to settle for lower profit margins. Some have adopted cost-cutting measures such as the use of thinner steel sheets for housing. Other suppliers have negotiated with long-time customers to share the extra expense.
For 2005, however, many interviewed companies revealed they will be forced to pass on the cost increase to buyers. On the average, FOB prices are forecast to rise 6 percent to 10 percent before the end of 2004, and by at least another 5 percent in 2005.
Nevertheless, the severe competition brought about by a crowded supplier base is creating a wealth of sourcing options for PC case buyers. An abundance of case designs has emerged, as makers try to outdo each other in releasing PC cases that will appeal to most buyers. Differentiation is not limited to the layout and front-panel finish, but includes experimentation with transparent and three-dimensional side panels, and the use of aluminum or aluminum-alloy housings for high-end models.
Industry Overview
Mainland China has replaced Taiwan as the global production center for PC cases. Despite the steady increase in costs of steel and plastic components since 2003, a projected 32 million units will be produced in 2004 in mainland China, with a total value of US$400 million. Sixty percent of makers' output will be shipped to overseas markets.
Out of the more than 100 PC case makers in mainland China, 30 to 40 companies have the capability to accept customized, large-volume orders. They also have exporting experience or are currently exploring overseas business opportunities. The rest are small-scale suppliers that mainly produce for the domestic market.
Guangdong province is the main manufacturing hub. About 80 percent of the mainland's PC case makers are clustered in Guangdong's cities of Dongguan, Shenzhen, Huizhou, Foshan, Guangzhou, Shangtou and Zhongshan.
Makers estimate that about 20 million PC cases are produced yearly in Dongguan alone, representing 30 percent of the total global output.
Outside Guangdong, a large concentration of PC makers can be found in the cities of Ningbo and Hangzhou, Zhejiang province; Shanghai; Beijing; and Henan province.
On the other hand, from a high of 40 to 50 in mid-2000, the number of medium to large PC case manufacturers in Taiwan has dwindled to less than 20. There are hardly any new entrants in the line.
Many Taiwan PC case factories are being relocated to the mainland, where labor is cheaper and PC case components can be purchased at lower prices. Facilities that are retained in Taiwan are limited to R&D, sales and marketing, and small-scale production for the domestic market.
Supplier Profile
Casing Macron Technology Co. Ltd
Casing Macron, a private enterprise with 100 percent Taiwanese capital, has been manufacturing PC cases since it was established in 1994. Over the years, it has expanded its range to include other products such as switching power supplies, card readers, computer mice, speakers and barebone systems. The company was listed in the Taiwan Stock Exchange in May 2004, and its head office is located in Taipei.
Casing Macron can produce 400,000 PC cases a month, 80 percent of which are Micro, Midi and Full Tower PC cases. The rest are desktop PC cases.
Output averages 210,000 units monthly. The company projects this figure to go up to 250,000 in 2005. So far, Casing Macron has released more than 25 metal chassis and over 100 front-panel designs.
Most of the cases can support ATX and Micro ATX form factors. The company can also provide aluminum ATX cases.
The company's OEM and ODM clients, including industry leaders NEC, Toshiba, Siemens, Lite-On and FIC, currently take up 35 percent to 40 percent of its output.
Casing Macron exports all its PC cases, shipping 40 percent to the United States, 30 percent to Europe and the rest to Northeast Asia. All its shipments originate from Yantian or Hong Kong port.
In 2003, its shipments totaled 2.5 million units valued at around US$25.75 million.
The company accepts OEM or ODM orders for its standard chassis. Adding buyers' own designs or front panels can be accepted with a negotiable minimum order.
The minimum order for standard cases is one 20-foot container. Delivery takes seven to 10 days after receipt of payment.
The company's headquarters in Taipei is responsible for after-sales services. Casing Macron allowed Global Sources to visit its offshore factory in mainland China. Located in Dongguan, Guangdong province, the factory occupies a total area of 45,000 square meters and employs a total workforce of about 2,000.
The plant is equipped with production machines for mold making, metal stamping and pressing, coating and painting, plastic injection and assembly.
Our tour guide said that the company bought all its machines from Japan and Taiwan.
The plant's high-speed pressing facility includes seven 50-ton, one 100- ton, one 250-ton and one 300-ton machines, while pneumatic pressing uses 33 80-ton, 43 110-ton, 24 160-ton and three 200-ton machines. The tooling section uses three milling, eight grinding, five lathe, four flanging, two CNC and nine cantilever drilling machines.
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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