Global retail prices for laptop computers are set to rise as contract manufacturers seek to raise prices for the first time in the face of rising raw material and assembly costs.

PC users have got used of falling prices in the past decade as the sophistication of the units has risen with each new model range. However, the so-called "China effect" on global manufactured goods prices is ending.

The Financial Times reports today that Quanta, Compal and Wistron, the world’s three largest notebook contract manufacturers by output, are in talks with their customers – branded computer vendors such as Hewlett-Packard, Dell and Acer – on how to share the burden of rocketing prices for key materials. Labour costs in China, where the manufacturers have their main production bases, are also rising.

“We will be raising prices for the first time,” said Ray Chen, chief executive of Compal, which expects to account for 25 per cent of the global market this year, told the FT.

“In the past, we [the contract manufacturers] were always forced to absorb upward price pressures. But 95 per cent of the industry is controlled by Taiwanese manufacturers, and the prices for key materials such as copper and plastic resin and the cost of labour in China have been rising so much that it doesn’t make sense for us to continue lowering prices.”

Quanta, Compal, Wistron and smaller competitors design and assemble most notebook computers, which the top PC companies sell under their own brands.

While Taiwanese contract manufacturers have seen their profits squeezed in recent years, they have been unable to get price rises accepted by the the branded vendors.

However, the FT says that several of the branded PC companies have agreed to share part of the burden, recognising that the entire supply chain is clamouring for price rises, according to executives at the notebook manufacturers.