Friday, December 8, 2006

OEM et al.

There’s a tech term that’s thrown around a lot in Taiwan called ‘OEM’. It basically means ‘original equipment manufacturer’.

It’s no secret that a lot of brand name companies come to Asia to get the innards of their computers or to wholesale manufacture their computers and gadgets only to slap their names on them when they are sold to the consumer.

According to whatis.com, OEM is the following,
“an OEM is a company that supplied equipment to other companies to resell or incorporate into another product using the reseller's brand name”

Basically it just makes financial sense. The brand name companies like IBM, HP and Apple want a cheap product so they design what they want at home and have it manufactured in Asia. Taiwan, for instance, makes wildly successful things like iPod shuffles for Apple.
An interesting article that explains the whole process in terms of another growing market, laptops, is in The Wall Street Journal:

http://online.wsj.com/public/article/0,,SB111825761813954442-d4x_lQnm5A2GOO1NR6Wi_DBAyys_20050709,00.html?mod=blogs

It turns out that the world’s largest laptop maker is not any of the biggies but is a Taiwanese company called Quanta. The article also talks about the growing relationship between Taiwanese and Chinese manufacturers for making the laptops for Quanta. Quanta, it shows, already has major stake in operations in China.

This movement to the Mainland is becoming more and more commonplace for Taiwanese high tech companies. It is also a major worry for the current Taiwan government, ever worried about losing the competitive edge and jobs to China. The process seems inevitable barring any major military confrontation (the article also covers cross-straights relations). Posted by Picasa
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