Hot demand and a massive battery recall are causing shortages of key components for the notebook computer industry, analysts and companies say.
The worst case scenario for users is the likelihood of fewer deals for new notebook computers over the next five months because PC manufacturers are paying a premium for components and have to pass those higher costs down the PC supply chain. Users are also likely to see fewer discounts and other promotions, such as extra DRAM or a bigger hard disk drive (HDD).
Henry King, an analyst at Goldman Sachs (Asia) LLC, said all companies are facing a shortage of LCD (liquid crystal display) panels, the screen part of a laptop, while only smaller notebook computer makers are having trouble with shortages of batteries and HDDs. The LCD supply for laptop makers has suffered this year due to brisk sales of LCD TVs, while the supply of small hard disk drives (HDDs) has dried up because they’re used in both notebooks and digital music players such as iPods.
The recall of around 10 million laptop batteries tied to Sony Corp. has kept the vital parts in short supply since last year, according to a spokeswoman for Taiwan’s Simplo Technology Co. Ltd, the largest independent notebook battery maker in the world.
The company, which accounts for around a quarter of all notebook computer batteries, said it has been able to ensure a steady supply to all existing customers but is not taking on new clients because it’s already making as many batteries as it can.
Hewlett-Packard Co., the number one PC vendor, believes it won’t be affected by any shortages. “HP has long term contracts with suppliers, so we won’t have any trouble,” said Dennis Chen, vice president and general manager of HP’s personal systems group, on the sidelines of a news conference in Taipei.
Big companies like HP have little to fear from the supply issues because parts-suppliers prefer their large, stable orders to the infrequent, small orders placed by smaller companies.
