Asustek Computer originally outsourced part of its 2016 notebook orders to China-based EMS provider BYD, but has recently retracted some of the orders and given them back to its Taiwan-based partners because the China-based maker was not able to stably supply the volumes that Asustek demanded. However, related notebook players declined to comment on their orders.

Because of fierce competition, notebook brand vendors such as Asustek have been aggressively managing their costs and have even outsourced orders to China-based makers.

Asustek designs most of its notebooks in-house and shifted some of its OEM orders that were originally given to Compal to BYD to reduce costs, but BYD was able to deliver less than 50% of the asked volume, prompting Asustek to shift some of the orders. Wistron, Quanta Computer and Pegatron Technology will all have a chance to land the orders, the sources detailed.

The sources pointed out that BYD's quotes are 25% less than Taiwan ODMs, which attracted Asustek to shift its orders. However, without experience and technology, most China-based makers are still not able to deliver products with quality the same as Taiwan makers.

However, the sources believe the advantage may only help Taiwan makers hold out for another 3-5 years and they will need to improve their technology to produce more competitive products.