Foxconn purchase of Dell plant will not impact notebook makers

Foxconn Electronics' acquisition of Dell's PC plant in Poland is not likely to boost its notebook shipments significantly since the plant's notebook output is very small. It might however trigger Dell to increase its outsourcing to Foxconn in the long run, according to sources from notebook makers. The in-house production lines for Dell's notebooks are mainly located at its plants in Malaysia while the Poland plant is mainly used for desktop production with a very small volume of notebook manufacturing. The acquisition should therefor directly benefit Foxconn's desktop shipments and sales, the sources pointed out. Foxconn's weakness lies in its lack of a strong R&D team, and purchasing a purely manufacturing plant will not benefit the company much in this regard, the sources noted. The acquisition will not affect the current outsourcing plans of first-tier notebook makers for 2010 since Foxconn's new orders are from Dell's in-house production. Foxconn's current notebook clients include Dell, Hewlett-Packard (HP), Apple and Sony with an estimated shipments of 3-4 million notebooks in 2009, and forecast shipments of six million units for 2010, the sources noted, according to digitimes.com