Lenovo reportedly will produce 60% of its notebooks in-house in 2014, while outsourcing to Compal Electronics will drop to only 30% of total shipments from the previous 50%, and Wistron's share will fall to 10% from 20%, according to sources from the upstream supply chain.

　　The in-house production for 2014 will mainly take place at Lenovo's joint venture with Compal in Hefei, China. For 2013, Lenovo outsourced 75% of its notebook production to Taiwan-based ODMs, handling only 25% in house.

　　Lenovo is set to shift its mainstream G series notebooks to in-house production in 2014 and has already started producing its enterprise ThinkPad to its joint venture in the second half of 2013.

　　With Lenovo and Samsung Electronics both raising their in-house production rates, the sources said the price competition in the notebook supply chain may become fiercer, leading to profit drops.

　　In addition to the production lines in China, Lenovo's production lines in North Carolina, the US already ramped up production in the first quarter of 2013, producing mainly the ThinkCentre M29p, ThainkPad 2 tablet and ThinkPad Helix ultrabook. Lenovo also runs production lines in Brazil.

　　Lenovo will also retrieve its purchasing rights from ODMs and give component orders directly to China-based suppliers, aiming to establish its own ecosystem, which the sources believe could create significant threat to Taiwan-based suppliers.

　　For 2014, Dell has outsourced 70% of its notebook orders to Compal and given Wistron 50% of its consumer model orders. Quanta Computer and Inventec will still be the main ODM partners of Hewlett-Packard (HP) for 2014.