Taiwan-based ODM Quanta Computer started production of 12-inch MacBook Air in small volumes in October and will gradually increase output beginning November, according to sources with Taiwan's supply chain.

Since initial production of 12-inch MacBook Air has not yet reached a satisfactory yield rate, component makers and Quanta are making efforts to hike yield rates for the time being, the sources said. As initial production is in limited volumes, 12-inch MacBook Air may not be able to hit the store shelves in time for Christmas, the sources indicated.

The new MacBook Air is slimmer than existing 11.6- and 13.3-inch MacBook Air models, posing challenge to component makers' technological capability, the sources said, adding the 12-inch MacBook Air is likely to come with a Retina touch screen.