According to reports in The Wall Street Journal and elsewhere, computer maker Dell may be looking to sell some or all of its computer manufacturing factories around the world to contract computer makers, in a bid to improve its bottom line. The Journal quotes one source briefed on the plan that dell may sell most or all of its manufacturing facilities within the next year and a half.
Dell’s manufacturing facilities were originally built around the idea of filling orders for large enterprise and organizational customers that required large volumes of essentially identical desktop PCs. However, over time the PC market has shifted towards notebook computers aimed at consumers, with customized orders becoming the rule rather than the exception. Dell built its name in part on rigidly controlled manufacturing processes, but now apparently sees its facilities as an impediment…and unloading them as a way to save over $3 billion in costs.
The primary customers for Dell’s manufacturing facilities would seem to be Asia-based contract manufacturers like Foxconn, Quanta, Asus, FIC, and Compal. However, it’s not entirely clear they would be interested in U.S.-based manufacturing facilities (with their comparatively high labor costs), or whether they would be willing to meet obligations Dell originally agreed to in exchange for tax breaks and subsidies.
Most computer manufacturers outsource some portion of their production to overseas contract makers. For instance, roughly half of HP’s computers are built by Asian contract manufacturers, and Apple ships many of its units directly to customers from Asian factories.
