OLPC Driving Taiwan's Computer Production in 2007-08

   
   
   
   
   
quanta
The future of computing?

Wow! Thanks to One Laptop Per Child, these are boom times for Taiwanese computer manufacturers like Quanta Computer.

With 2,500 computers rolling off OLPC XO laptop production lines in the first quarter of 2007, ramping up to 10 million laptops in a year, Quanta Chairman Barry Lam projects Quanta's 2007 revenues will be $15 billion US dollars, up from $14 billion US dollars in 2006.

OLPC is not just changing Quanta's fortunes with its laptop revolution. All the OLPC Children's Machine XO component manufacturers are also ramping up capacity to handle 10 million computers, a 20% increase in the total worldwide laptop production for the year and the largest single computer distribution ever.

  • Realtek Semiconductor, the sole clock generator IC supplier for OLPC, is expected to see its clock generator shipments grow by 40% on year to 40 million units in 2007
  • Everlight Electronics Co. Ltd. expects backlight orders to double to 20% of US$363 million in revenue this year partially due to OLPC backlight products
  • Chi Mei Optoelectronics (CMO) has dedicated its entire capacity of 3.5-generation and 4G LCD plants to Quanta Computer, providing LCD screen for OLPC notebooks
  • Both GP Batteries and Simplo claim to be supplying Ni-MH battery packs to OLPC
In total, this production ramp-up will represent a $1.5 Billion dollar transfer of wealth from the developing world to Taiwan, via taxes, loans, and donations financing an unproven educational learning tool. So yet again, I ask for Open Source OLPC software and hardware.

one laptop per child
All made in Taiwan

But while my call to share production capacity and skills transfer with the developing world - arguably a transfer just as transformative as a laptop per student - may go unheeded at OLPC, they are issuing their own call for laptop and peripheral production managers.

If you have the desire to develop a 10$ DVD player, a $100 projector, and a $0.10 oscilloscope adapter, or want to lead the design on the next generation $100 laptop architecture, be sure to check out OLPC's job openings.

No word yet if you'll actually get a salary or have to work for OLPC warm & fuzzies, but either way, Taiwan's computer manufactures will love you long time. And while you live half your life in Taipei, you'll be finding your own love with too many Carnegies kinda nights.

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22 Comments

From Info World:
http://www.infoworld.com/article/07/02/15/HNonemillionolpclaptops_1.html

"Quanta Computer, the world's largest contract laptop PC manufacturer, already has confirmed orders for one million notebook PCs for the One Laptop Per Child (OLPC) project, a company representative said Thursday."

This must be lies. It's impossible to make money by helping disadvantaged people.

Do not be a fool. Read the Quanta link. Quanta expects to make a small profit on each machine. OLPC is a nonprofit organization, but Quanta is a contract manufacturer, a for-profit business.

The component cost (including labor?) for the laptop was mentioned as $140 and the laptops are being sold at $150.
Thats a profit of 10 million dollars per 1 million shipment.
You could look at it as a 7% profit margin.
Quite acceptable for many manufacturers but not what I call boom times.

Network world is a bit more optimistic on the price of the laptop. It quoted the current price as about $130 and said that Quanta thought they might get the price down to $100 sooner than expected.
See:
http://www.networkworld.com/news/2007/021507-one-million-olpc-laptop-orders.html

Yeah, it's not lies (I never thought it was) it's just a mean spirited article. Criticism is good but this is silly. ;)

Patrick:
"Mean spirited"? I'm in awe of how OLPC is changing the fortunes of Taiwanese manufacturers. I only wish there were more countries sharing the wealth. Brazil is making the One Sever Per School, but that should only be a start.

Tim:
Its $150, even OLPC says so. Check out http://www.olpcnews.com/prototypes/olpc/olpc_xo_100_dollar_laptop.html

Wayan:

"I'm in awe of how OLPC is changing the fortunes of Taiwanese manufacturers."

Taiwanese manufacturers have been doing fine and you know it. And you also know why they were chosen. Get real.

Taiwanese manufacturers are doing fine, but its amazing to see how a single massive order like OLPC flows through the production line and the companies' performance reports to stockholders.

They were chosen because they were the cheapest, yet that doesn't mean a country ordering a few million OLPC's shouldn't also ask that certain parts be manufactured in their own country. That's been a common practice for $150+ million hardware orders in many industries.

The $218 pseudo-laptop is going to change the fortunes of billions of people, not only the Quanta employees.

In fact, the entire computer industry will soon realize that the future lies with these retro devices: underpowered processor, no hd, microscopic display and no useful software.

Progress will come to the USA via Nigeria. I can see the average American person desperately trying to ship his freckled 10 year old to be educated in the Brazilian schools where "learning to learn while learning" will be the norm.

Negroponte is shifting the paradigm (whatever that means...)

I would like some straight talk from olpcnews.com

How much do you pay google for your google ads and the ads that show up when you search CNN for "$100 laptop?"

Perhaps blogging doesn't pay but you should disclose these details. To some this site appears to be "astroturf" --> a muckraking site for Intel and Microsoft that pretends to be a grassroots phenomena.

Also, by the logic of this article Mohamed Yunus transferred wealth out Bangladesh w/ his microcredit financing for cell phones. None of the cell phones that Grameen Bank purchased were made in Bangladesh but they succeeded in creating wealth among Bangladesh's neediest. OLPC will do the same.

Cynical articles like this one weaken OLPC News' credibility. I believe this site has a legitimate purpose: to keep the OLPC project true to its goals. However the article above has little more journalistic value than the comments on Slashdot.

Curious,

Grameen's process was very private enterprise focused - they bought phones as they generated income. OLPC asks governments to buy multi-million dollar batches of laptop with public funds - a whole different concept.

When public funds are involved, and $150+ million at that, I believe governments have the moral obligation to maximize the return on investment. Local manufacturing would be one way to do that.

As to the astroturf accusation - thanks for the pseudo-compliment. That my humble hobby of website could be so influential and informative that people can't believe its just a few writers and I gives me pride.
http://www.bellybuttonwindow.com/2006/america/blogging_big_leagues.html

Grameen Bank may have been private enterprise focussed but it controverts the main point of your article -- purchasing large amounts of foreign technology amounts to a wealth transfer.

Further, you've probably seen and used the laptop. If you haven't you really should before you continue to slag this project. The laptop works and it works well. It is no longer vaporware unless you consider computers in general are vaporware or have yet to prove their value.

Nice to hear that criticizing OLPC has brought you the fame--if not necessarily fortune--that you've always yearned for. Now how about some details on those Google Ads?

I don't slag the laptop itself. It's clock-stopping hot technology, which I can't wait to see used in many different ways.

I am very concerned about Negroponte's idea that the developing would children can be educated with only this laptop and the billions of dollars it would cost to run his experiment. http://www.olpcnews.com/commentary/press/schizophrenic_support_olpc.html

If OLPC was run the Grameen way, from the grassroots and financially sustainable by its users, I would be a 100% fanboy.

curious wrote:

> Further, you've probably seen and used the laptop. If you haven't you really should before you continue to slag this project.

If the laptops were actually available to ordinary people here, not just third-world governments, this would be easier. But even that would let one test just the hardware. The social experiment part of OLPC is of course not testable by fawning over the hardware ... and one wonders whether actually testing it will require that multi-billion dollar expenditure by said third-world governments. Remember, this is not charity or philanthropy.

Should the children educated with the laptops perhaps pay back the Governments in later years once their education has enabled them to earn a living? The truth is, it will probably happen indirectly.

If you look at the cash flow from sales of laptops there is an interesting trend. Many third world countries have production plants on their shores. Semiconductors are produced in Mexico, The Philipines, Thailand, Indonesia to name a few which gives people jobs and the economy a cashflow.
http://www.digitalmediaasia.com/default.asp?ArticleID=16325

Governments buying the laptops have the deal brokered by the OLPC and pay Quanta directly. Quanta have purchased displays, batteries and semiconductors from other manufacturers around the World. They may be making the injection molded plastic case in-house or have it sourced out to other businesses in turn.

Companies make profits. They employ workers. Workers eat food and spend money. Its an economic system thats worked well for the players lucky enough to have assets to trade.

Look at China. Their main asset is their people - and lots of them. They work for a few cents an hour. They actually educate their children too!

Whats to prevent countries like Bangladesh becoming the next China? Why not build a semiconductor plant in Libya. Plenty of sand there. We've already seen South Korea become a wealthy country through providing cheap labor and attracting investments. I even drive a Korean car!

Many third world countries lack a stable government. Investors get very nervous when military coups occur. Civil wars dont help either.

In the long run, educated people are smart people. Educating the population of any third world country will dramatically lessen the chance of military dictatorships destroying the political stability.

This in turn attracts investment. Wow! that $150 million they spent on laptops just flowed back in 10 years later in manufacturing investment. Gotta love the system.

Another good OLPC article with commentary. Raises some interesting points and some of the comments are also good:

http://paralleldivergence.com/2007/02/17/olpc-the-revolution-begins

http://www.bloomberg.com/apps/news?pid=20601080&sid=ae3kPsoTruy4&refer=asia
March 6 (Bloomberg) -- Nicholas Negroponte's plan to give laptop computers to 100 million poor children is enriching parts makers more than the principal manufacturer.

Taipei, Taiwan-based Quanta Computer Inc., the lead contractor on the One Laptop Per Child program, faces more pressure than suppliers ENE Technology Co. and Simplo Technology Co. to keep prices down, said Bevan Yeh, who helps manage $3 billion at Prudential Securities Investment Trust Co. The program envisions paying $100 each for the computers.

``Parts suppliers will enjoy high growth as this initiative reaches a global scale,'' said Yeh, who's based in Taipei. ``Quanta's mission is to make laptops at the lowest possible price, so its profit will not be as rosy.''

Yeh recently bought shares of ENE, a maker of chips used in the computers, and he's considering adding Simplo, which builds batteries for the devices, and Shin Zu Shing Co., which makes the hinges that attach the screen to the main body. He doesn't own Quanta, the world's largest notebook-computer producer.

Shares of ENE and Shin Zu Shing have almost doubled since then and are among the top 100 gainers of the 1,160 stocks traded on Taiwan's two main exchanges. Simplo has climbed 79 percent and Sunrex Technology Corp., a keyboard maker for the computers, has added 33 percent in the period.

Analog IC designer Ene Technology had its share price go up to its daily 7% limit yesterday over the prospects of a revenue boost from the OLPC program. http://www.digitimes.com/bits_chips/a20070517PD204.html

Ene Technology has received orders to supply components for the One Laptop Per Child (OLPC) program, which will start shipping its low-cost notebooks in September, while Anpec Electronics and Aimtron Technology may also have obtained power management (PW) IC orders for the program, according to industry sources.

DEAR SIR,
WE ARE A CONSULTING FIRM BASED IN ACCRA - GHANA.

OUR MAIN OBJECTIVE IS TO HELP THE GOVERNMENTS IN WEST AFRICA TO REVAMP AND RE-ACTIVATE MOST OF THEIR PARASTATALS WHICH ARE PERFORMING BELOW AVERAGE IN FULL RECOVERY.

WE SOURCE FOR INVESTORS FOR THE GOVERNMENTS AND ALSO WE LOOK FOR SUPPLIERS TO SUPPLY NEEDED EQUIPMENT AND SERVICES FOR GOVERNMENT AGENCIES ON EITHER OPEN OR CLOSE TENDER CONTRACTS.

WE DO THESE ON COMMISSION BASES AND OUR COMMISSION IS PAYABLE AFTER CONTRACT ARE SIGNED, AWARDED AND PAID FOR.

NOTE: THE FOLLOWING ARE CONTRACTS TO BE AWARDED TO PROSPECTIVE SUPPLIES IN THE AGRICULTURAL SECTOR AND ENERGY.

(1) SUPPLY OF TRACTORS, GENERATORS, COMPUTERS/HOME APPLIANCES, INSECTICIDES AND AIRPLANE, HARVESTERS AND FERTILIZERS.

INTERESTED PARTIES MUST CONTACT US FOR FURTHER DETAILS

BEST REGARDS,
BEN KOFI

Companies cannot survive unless they are profitable. The management guru, C K Prahalad has interesting take on "Fortune at the bottom of the Pyramid":

http://economictimes.indiatimes.com/articleshow/268965.cms

http://www.chillibreeze.com/bookreviews/TheFortuneAtTheBottomofThePyramid.asp

Encouraging large companies to deal with projects that will benefit the bottom of the Pyramid (2/3 of the World's population that live under $2/Day) will ultimately benefit every one. As CK points out in his book, the Poor are sophisticated consumers who demand more for their money.

I am so pleased to learn about the new design of the laptop which is ment for the poorest kids, I dont think there is any other thing greater than this objective.This will help the world to overcome many problems, because knowledge will uproot evils in form and shape.

I extend sincere gratitude to every one involved in this effort. I would like to obtaine at least 10 laptop to every school in Afghanistan. This will be an effective way to establish the rule of law and return peace to the war torn nation.

Sayar Dehsabzi

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