Microsoft Ups 360 Production with New Facility

Retail shortages still a blight.

Posted by Staff
Microsoft Ups 360 Production with New Facility
Microsoft has announced that it will commence production of the Xbox 360 console in a new manufacturing facility within weeks, taking the number of factories assembling the 1,700 or so components required for each unit to three.

Celestica Inc was chosen by Microsoft as its new partner, though where the facility will be based was undisclosed at time of press. The firm has production facilities able to cope with the contract in Europe, North and South America and Asia, with current conflicting talk pointing towards using a Mexican facility to alleviate ongoing supply problems in North America, countered by the belief that a Chinese facility will be preferred.

The news will be the first feather in the cap of incoming Celestica VP of worldwide operations James Rowan, promoted from a European role last week.

A statement of intent was made by Microsoft and Celestica late last year regarding a manufacturing deal between the two companies, following similar announcements from Flextronics and Taiwan-based Wistron, though Celestica has produced nothing to date.

Further talk points towards a smaller split of production for the new partner, with RBC Capital Markets analyst Amit Daryanani forecasting that only around 15% of retail units to ship from the Celestica facility. It is thought that Flextronics has the lion's share with a whopping 75%, though it is likely that these allocations will be somewhat transient given reported fail-rate issues allegedly blighting phase one of the Xbox 360's global launch.


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