LG has made the decision to outsource the production of its LG Gram flagship series of thin and light laptops to an Original Design Manufacturer (ODM). This move means that a different company will now be responsible for manufacturing LG's high-end notebooks, moving away from in-house production.
LG Gram to be Made by ODM
According to a new report, Quanta's subsidiary Dafeng will be producing the upcoming Gram models. Dafeng, a Chinese ODM, has previously manufactured other LG Electronics products. Now, they will also be tasked with producing mid-range Ultra PC models and even the Gram 2-in-1 notebooks. An industry insider revealed that the base LG Gram was previously manufactured in-house at LG's Nanjing site before the recent outsourcing.
Cost Reduction and Improved Efficiency
The decision to outsource is likely driven by the desire to reduce costs and improve efficiency. LG's Nanjing plant reportedly faced a loss of 2.4 billion won in the third quarter of this year. By outsourcing production, the brand hopes to minimize losses going forward. In their recent financial report, LG's unit that sells laptops and IT products also suffered a significant loss of 20.5 billion won.
Slowing Demand for IT Products
LG believes that the decline in demand for IT products is the main reason behind these losses. The LG Gram 2023 series of premium laptops was released in India in June, and earlier this year, the brand launched the LG Gram SuperSlim OLED, which is their thinnest laptop featuring an OLED panel.
Overall, LG's decision to outsource the production of its LG Gram series of laptops to an ODM reflects a strategic move to reduce costs and improve efficiency amidst a challenging market for IT products.
