Compal Electronics reportedly plans to enter server the ODM business in 2013 and will establish a new department to handle all related services and sales, according to sources from PC players. Commenting on the rumor, Compal pointed out that the company is considering such a strategy, but refused to reveal any further details.
Since the notebook industry is currently seeing weak growth, Compal plans to consolidate its notebook production capacities in Kunshan, China from five plants into just three, which leaves the extra capacity for use in server manufacturing.
The sources noted that Compal has already been preparing its server business for more than one year and since the company's major notebook clients Dell and Lenovo are both aggressive about server business, there will be a great chance for Compal to land orders from these clients.
Server brand vendors mostly welcome Compal's involvement in the server ODM business, as it gives them more product choices and should also assist brand vendors over cost control, while Compal's entrance will also offer server brand vendors a choice to place their orders, as their existing upstream ODM partners such as Quanta Computer and Wistron are competing against them through white-box server sales.
Article translated by Joseph Tsai
