Asustek Computer reportedly has outsourced orders for about 1.5 million notebooks to China-based EMS provider BYD, equivalent to less than 10% of Asustek's total notebook shipments in 2016, according to sources from the upstream supply chain.

The sources believe Asustek is looking to raise its bargaining ability with its Taiwan-based ODM partners Quanta Computer and Pegatron Technology. Although BYD has lost some of its orders from Asustek due to its inability to stably supply orders, the China-based maker may still be able to see increasing orders in 2017 if it is able to improve both the quality and speed, the sources noted.

However, if BYD is still not able to meet Asustek's demands before the end 2016, the China-based maker is likely to completely lose the orders, which could become a major issue for BYD, which has been eagerly striving for orders to fill its empty capacities left from tablet and smartphone production.

Although notebook specifications have been rising, their prices have not enjoyed the same growth; therefore, most brand vendors have been cutting their costs from components, assembly services and channels to maintain profitability. Asustek, which shipped 20 million notebooks in 2015 and is expected to continue achieving growth in 2016, is an important client that ODMs are trying to secure.

Pegatron, which used to be the manufacturing department of Asustek, is seeing its orders from the brand vendor continuing to drop, but Pegatron still managed to land about five million units of orders from Asustek for 2016, the sources added.