TAIPEI Dec 24 Quanta Computer (2382.TW), the world's largest contract laptop PC maker, will soon sign an agreement to build a plant in western China, aiming to supply to global PC leader HP (HPQ.N) from 2011, a source said on Thursday.
Quanta's smaller rival Inventec (2356.TW) will also sign a similar agreement with Chongqing within the next two months, a source close to the city government said, following months of discussions with officials. [ID:nTP15623]
Quanta's factory in the western Chinese city of Chongqing would begin production in the second half of 2011, with preliminary testing of the site due to begin by the middle of next year, the first source close to company officials said.
"Both companies will sign the agreement by about January next year," said the first source, adding that both companies had yet to decide on the total size of investment and production numbers.
Both sources declined to be identified because discussions were ongoing and the news had not been made public.
Officials from Quanta and Inventec declined to comment.
HP said in October last year that it would set up a manufacturing complex in Chongqing to make notebook and desktop PCs for the Chinese market to diversify its production base in the world's most populous nation.
Contract manufacturers and other suppliers frequently set up manufacturing facilities in areas where their clients already have large operations, streamlining logistics and supply chain issues.
Many top PC brands, such as HP, Dell DELL.O and Acer (2353.TW), typically carry out their own design work, and outsource the labour-intensive production process to contract manufacturers such as Quanta and Inventec. (Reporting by Jennifer Yang and Kelvin Soh; Editing by Chris Lewis)