Recently, Taiwan's share of the growing notebook market is expected to continue slowly rising. But systems makers on the island Taiwan face challenges such as the transition to LED backlights and the need to expand their overseas markets.

In Taiwan, at least 15 companies currently design and make notebooks for major brand name companies. Two of those former no-name manufacturers—Acer Inc. and Asustek Computer--have established significant notebook businesses under their own brands, thanks in part to their close ties to the many key component suppliers in Taiwan. Acer now ranks third and Asus eighth in the 137 million/year worldwide market for notebooks. Both companies are well positioned for market share gains. However, Acer still lacks a strong high-end product line and Asus has virtually no presence in the North America market.

Taiwan has made the vast majority of the world's notebooks for years. Japan's notebook makers such as NEC, Toshiba and Sony still make about 15 percent of their systems in house, but that percentage may fall slightly as more work goes to Taiwan, Chen said. The latest quarterly report ranked the top four Taiwan contract notebook makers as Quanta (at 31 percent of the market), Compal (24 percent), Wistron (16) and Inventec (11).