Tablets cause supply concern for component makers

With the increased production expected by manufacturers of tablet PCs, concerns are being raised over the ability to meet demand of components, with the possibility of shortages.

According to sources from upstream component makers, says Digitimes, touchscreen, battery and chassis components could face the prospect of shortages once tablet shipments begin.

Touchscreens for instance will have to deal with a supply chain for mid to large-size screens which is not yet mature, leading to worries that the immature processes may cause low yield rates and tight supply.

Also, as far as batteries are concerned, though they use a similar process to notebook batteries they use a different design which will mean manufacturers need to dedicate some existing production lines – putting a strain on capacity.

Meanwhile tablet makers are expected to use metal chassis to utilise fan-less designs, the component makers, which usually manufacturer similar chassis for smartphones, may have a tough time adapting to producing mass volumes of 7 or 10-inch chassis in such a short time scale. 

This is all indicative for the manic rush within the industry to bang out new lines of devices, with most vendors planning to ship 700,000 units per quarter. Of course there are a lot of firms planning to jostle for a place alongside Apple in the relatively new market.

This all works with the proviso that just about every human on the planet is dead set on purchasing one of the fun but perhaps not functionally vital devices.   

Though with Apple’s iPad 2 imminent it is unlikely that the fervour will cease anytime soon.

Furthermore it is thought that the notebooks are likely to see price increases of around 10 percent due to supply capacity being affected by the production of tablets in the second quarter of 2011, according to Digitimes’ notebook manufacturer sources.

Due to mainstream notebook panels using 5G production lines, the same as many tablets and e-book readers, supply capacity is facing a squeeze.

It is thought that first tier brands have recently started to stockpile inventory to combat this, causing second tier notebook brands concern of purchasing panel for mainstream notebooks. 

Apparently HP already began preparation in the fourth quarter of 2010.