Sales have dropped almost 20% at Compal, the world's second biggest contract manufacturer of laptops. This is a massive slump – big enough for KitGuru to want to dig a little deeper to see what's going on in the Neihu-based company.

If you or any of your friends have ever bought a laptop from Acer, Dell, Toshiba or Fujitsu – then it's likely that you have used a Compal product. They are one of the ‘big five' and, until recently, had been doing ‘very well thank you'.

Now, with the announcement of February 2011 shipments, the bad news is being delivered by the ton. In a market that's preparing to explode in iPad purchases, Compal has posted just 2.7 million unit shipments, down 18%.

The manufacturing giant also makes LCD TVs and that division was also down 18%.

For a small company, that kind of drop might be acceptable, but when you have over 30,000 employees – it must put a strain on the finances. The worst thing for a production company is a huge change in the number of units needed. It can easily put jobs at risk.

So, what does Compal blame for this downturn?

Interestingly, CEO Ray Chen blames Intel.

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To put this drop into perspective, consider that Compal posts over $12 billion a year in revenue. That's $1Bn a month. Knock 18% off that and you just lost $180 million. With the average Chinese factory worker living on about $300 a month, that's almost enough money to pay the entire Compal workforce, for a full year, twice.

KitGuru says: It's hard to know how much Intel's Sandybridge problem is to blame for this drop. It would have contributed something – but we're not sure if it would have been anything like $180m. Maybe it's Compal's old friend Foxconn and the huge upsurge in iPad production – ahead of the iPad 2 launch. Maybe it's just seasonal. Whatever the reason, Ray Chen is predicting a return to normal shipments within 2 months. Watch this space.

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