Quanta Computer and Compal Electronics have sent employees from factories in eastern China to support their factories in Chongqing City, western China, due to short supply of labor, according to industry sources. In addition to labor shortages, the average productivity of workers hired in Chongqing is lower than those working in eastern China, the sources indicated.

Quanta plans to increase the capacity of its plants in Chongqing to account for 30% of its total volume in the fourth quarter or the first quarter of 2012, while Compal also plans to increase SMT production lines to increase its capacity, while Wistron is set to have its plants in Chongqing and Chengdu to contribute 40% of its total capacity by the end of 2012.

Currently, there are two methods for ODMs to hire workers in Chongqing. The fist is to publicly recruit workers and the second one is to cooperate with local education units. However, through public recruiting, ODMs always have a difficult time to filling vacancies, while employees have a high turnover rate close to 60-70%, the sources noted.

In addition, since workers in inland China have lower working efficiency than those in coastal areas, meaning that if each production line in coastal areas can produce 1,000 PCs, production lines in Chongqing can only produce 600-700 units, to ensure smooth production, ODMs normally will prepare some backup staff, which increases their costs.

The sources pointed out that the ODMs originally expected inland China to have a more sufficient workforce than in coastal areas, but the actual situation has not turned out as expected, and with local residents having rather strong points-of-view, there have already been many disputes between workers and employers since the migration.

Furthermore, the local governments of China's coastal regions, who are dissatisfied about ODMs' migrations to inland China, have been making strict inspections on ODMs' shipments, disrupting shipments to the ODMs.

Source:digitimes