Taipei: Taiwan's computer makers are morphing from simple contract manufacturers into designers and innovators as they fight for survival in a competitive sector.

Four out of five new notebook computers are now designed on the island, as firms making everything from cellphones to PCs move from a "do what you're told" mentality to a "let's innovate" one, transforming the "Made in Taiwan" label.

The change is partly driven by new business opportunities, but also by sheer competition as companies try to set themselves apart with their innovative design.

Some of the world's top electronics makers, from PC makers Dell and Hewlett-Packard to cellphone makers Nokia and Motorola, are looking to domestic behind-the-scenes players with names like Quanta Computer and Asustek Computer to not only make, but also design their latest gadgets.

Dell, the world's top PC maker, said that over 50 per cent of its notebook PCs are now designed in Taiwan by its locally-based team working closely with its manufacturing partners.

Dell, whose top Taiwan manufacturing partners include Quanta, set up its design centre in Taiwan in 2002 with 50 people for PC and notebook development.

Since then the facility has grown more than six-fold to 330 staffers.

"We still plan to further expand our design team in Taiwan as it is an important part of our business," said Shane Cheng, Dell's regional director.