In July 2000, Quanta Computer was reported to have won an order to supply Compaq with about 50,000 consumer notebooks a month starting in September. The notebooks were aimed at the sub-$1,000 market. The reports did not disclose a signed contract value, exact model, configuration, or unit price, so the monthly volume—not a dollar total—is the clearest measure of the deal’s size.
What did Compaq plan to buy from Quanta?
EE Times reported in July 2000 that Compaq planned to buy approximately 50,000 new consumer notebook PCs from Quanta each month, with shipments due to begin in September. The figure was attributed to analysts and local reports; it was not presented as a publicly disclosed contract total. The coverage did not identify the notebook model or establish how many units were ultimately delivered. EE Times, 2000
The notebooks targeted prices below $1,000. That positioning made the award relevant to Compaq’s effort to source affordable consumer systems, but the reports do not state the per-unit price or the value of Quanta’s order.
Why did Compaq select Quanta?
Analyst Sharon Su of ABN AMRO Asia Ltd. attributed Quanta’s win to its combination of competitive pricing and performance relative to other Taiwanese suppliers. At the time, Quanta was described as one of the world’s three largest laptop-PC makers, giving it scale in a market where cost and the ability to bring products to market mattered.
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“Quanta won the deal as it’s able to offer more competitive prices and better performance than any rivals on the island.”
Sharon Su, regional hardware analyst at ABN AMRO Asia Ltd., quoted by EE Times in 2000
How did the award change Compaq’s Taiwanese supplier mix?
Before Quanta’s entry, Arima had been Compaq’s only Taiwanese supplier of consumer systems. Analysts told EE Times that roughly 90% of Arima’s sales came from Compaq, leaving the smaller supplier unusually exposed to one customer. Quanta’s award therefore signaled a change in the consumer supply chain, not a complete replacement of every Taiwanese supplier: Compaq’s commercial notebook models were outsourced to Inventec.
| Supplier or supplier group | Role described in 2000 coverage |
|---|---|
| Quanta | Planned supplier of about 50,000 consumer notebooks per month, starting September 2000; sub-$1,000 segment. |
| Arima | Previously Compaq’s only Taiwanese consumer-system supplier; analysts said about 90% of its sales came from Compaq. |
| Inventec | Supplier of Compaq’s commercial notebook models. |
The reports describe this as part of a broader shift: smaller Taiwanese suppliers’ close customer relationships were coming under pressure as buyers prioritized cost and time-to-market. Larger OEMs such as Quanta were better placed to compete for high-volume work.
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How large was Quanta at the time?
Quanta forecast 3.3 million notebook-PC shipments for 2000. EE Times’ initial report compared that with 2.17 million in 1999, while a follow-up report gave the earlier year’s volume as about 2.8 million. The contemporary reports do not reconcile those different baselines, so they should not be treated as a single confirmed growth calculation. EE Times, 2000
Compaq separately said it planned to buy $8.5 billion worth of Taiwanese products during 2000. That was a Taiwan-wide procurement plan, not the value of Quanta’s notebook order. EE Times also reported, citing the Commercial Times, a $15 million payment for internet infrastructure at Quanta’s new TFT-LCD factory; that payment was likewise separate from the notebook contract.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What did the deal reveal about margins and diversification?
The award came amid substantial margin pressure. Su said gross margins for Quanta and other first-tier players had fallen to 10% in the first quarter, compared with more than 20% in 1998. The figures were her reported assessment in 2000, rather than a disclosed margin for this particular Compaq order.
“The gross margins of Quanta and other first-tier players slumped to 10% in the first quarter, a huge drop from more than 20% in 1998.”
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Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.Sharon Su, quoted by EE Times in 2000
Quanta was also seeking a broader customer base and expanding beyond conventional notebooks. Company spokesperson Sherry Yang said the company expected to add customers and ship more products during the year. The coverage noted that Quanta was increasing information-appliance production and had launched a Web pad using Transmeta Crusoe processors. These moves show how the company was responding to the pressure to grow volume while pursuing products beyond notebook PCs.
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