The Taiwanese firm, with manufacturing largely based on the Chinese mainland, could be forced to abandon a number of notebook orders with low-gross profit margins in order to maintain its profitability. This is likely to mean that Quanta will be shipping substantially less units in 2011
Quanta had aimed to ship a total of 60 million notebooks in 2011, though due to a negotiation with HP about its new profit-preservation strategy, it looks as though this target will not be kept.
It is thought that because of increasing labour costs in China and the rise of the NT dollar, while EMS providers compete for orders over price as well, alongside HP typically asking for lower quotes than other brand vendors, firms such as Quanta who deal with HP have decided to negotiate to raise quotes, according to Digitimes.
However, the company is expected to see gross margins increase for the year.