Taiwan's Compal to raise laptop part prices

Acer, Dell and Hewlett-Packard would pay more for notebook contracts

Compal Electronics, one of the world’s biggest contract laptop makers, will raise component prices this year to shore up a drop in profits, affecting computers made for Acer, Dell and Hewlett-Packard, the company said on Wednesday.

The Taiwan-based firm that produced 48 million laptops last year will gradually raise prices over 2011 on casing and copper for printed circuit boards, said investor relations head Chang Chih-ming.

The increases, which also reflect higher petrochemical prices and a surge in the local Taiwan dollar currency since late 2010, will be passed on to the three major notebook vendors, Chang said.

Acer, Dell and Hewlett-Packard have not indicated whether they would raise final consumer prices of laptops, he said.

"We are trying to improve our margins," Chang said in an interview. "But I cannot judge what our clients are going to do."

He would not say how steep the component price increases would be.

The notebook maker with US$12.8 billion in annual revenues told Taiwan’s semi-official Central News Agency that producers of components and accessories, including connectors and power supplies, had already raised prices on their products.

Compal is one of many Taiwan companies that do original design manufacturing for better-known sellers of notebook computers based overseas. Apple has also tapped Compal to assemble a new line of iPads, according to one report.

Compal also joins other Taiwan computer makers in raising prices on vendors as the currency appreciates, petrochemical prices go up and minimum wages rise in mainland China where end-products are often put together, said Wai Ho Leong, regional economist with Barclays Capital in Singapore.

Minimum wages in coastal China increased 25 to 30 percent in the third quarter of 2010.

Notebook prices for everyday users will increase 10 to 15 percent, Leong forecast. “Inflation is going to keep getting exported to overseas buyers,” he said.

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