Laptop part shortage to push up prices?

LCDs, DVD drives, batter cells in short supply

By Tony Smith • Get more from this author

16th August 2007 06:15 GMT

Notebooks could become more expensive to buy through the rest of the year if claims that key components are in short supply prove true. Among the laptop parts said to be hard to find: display panels, battery cells, DVD drives and motherboards.

The warning was sounded by moles from within Taiwan's contract manufacturer community, all cited by local newssite DigiTimes. Most, if not all, of the world's major and not-to-major laptop brands source their machines from Taiwanese manufacturers.

Complete and semi-complete machines are produced here to the computer suppliers' specifications, then shipped into the vendors' distribution channels or their workshops for build-to-order modification.

Either way, limited component supplies will hinder the manufacturers' ability to ship out sufficient systems. That drives up consumer waiting times and, potentially, prices too.

It's not clear why the various components are experiencing shortages, but demand outstripping the ability to supply is one factor, as is intense price competition, which persuaded manufacturers to keep their warehouse supplies low, the better to take advantage of whichever producer has the best price at a given time.

Some observers claim this price competition could actually help keep laptop prices where they are, as component manufacturers keep prices down despite the supply restrictions in order to prevent orders going to rivals. However, if the supply remains tights, price rises seem inevitable.

However the shortages affect pricing, the dearth of components doesn't appear to be due to end any time soon, with the report quoting sources who don't expect to see any change until November at the latest.