Computing device ODMs are in talks with their customers about raising their contract quotes to reflect rising materials costs, according to Compal Electronics president Ray Chen.

Chen pointed out that the ODMs are looking to have their clients share half of the increased costs at least, and expect end product prices to be affected in the second quarter, at the earliest.

Despite the slow season, MLCCs are still in tight supply because of rising demand from car-related sectors. Meanwhile, plastic pellets, packaging boxes and PCBs are also seeing rising prices, significantly undermining the ODMs' profitability, Chen said.

For 2018, Chen expects the notebook market to achieve an on-year performance between positive and negative 2% and enterprise notebooks will be the main growth driver as a replacement trend will be triggered by Microsoft stopping providing support to the older versions of Windows.

The consumer notebook market has seen weak demand since the year-end holidays of 2017, but Chen still expects Compal to achieve results better than market average in 2018.

Compal expects its PC shipments in the first quarter of 2018 to slip 15-20% sequentially, while non-PC products will see a 20-30% drop. However, compared to the same quarter on a year ago, both segments will grow by double-digit percentages. As for the second quarter of 2018, both PC and non-PC product shipments are expected to grow 15-20% sequentially.

For 2018, Compal's PC shipments will enjoy a single-digit percentage growth on year and non-PC product shipments will have over a 20% rise.

Compal also expects its gaming notebook and Chromebook shipments to rise in 2018 and is handling gaming product manufacturing for a US-based notebook vendor and a Taiwan-based one.