Taiwanese electronics firms mulling local production for U.S. market

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(Source: Pixabay)

(Source: Pixabay)

Several major Taiwanese contract electronics manufacturers that have plants in China said recently that they are considering setting up production facilities in Taiwan to supply the United States market, in a bid to avoid U.S. tariffs on China-made products and other trade disputes between the two countries.

Speaking with the press, Pegatron Corp. CEO Liao Syh-jang (廖賜政) said the company is thinking of using a plant in Hsinchu specifically for shipments to the U.S. if the Beijing-Washington trade issues are not resolved.

Pegatron, a PC contract manufacturer that also assembles iPhones, said it had planned to use one of its plants in New Taipei and another in Taoyuan to make products for the U.S. market, but is now considering a new facility in Hsinchu that will concentrate on value-added items with higher profit margins.

Since January, Pegatron has been manufacturing information and communications products for the American market at its plant in Batam, Indonesia, and those shipments are expected to increase in the second half of the year, Liao said.

He said Pegatron will be keeping a close eye on the expected meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping (習近平) at the G20 summit in Japan next week.

Meanwhile, Quanta Computer Inc., the world's largest notebook computer ODM services provider, last November bought a complex in Linkou at a cost of NT$4.28 billion and is likely to use the plant to manufacture products for the U.S. market.

Since the fourth quarter of last year, Quanta has also been shifting some of its production from China to a facility near its Taiwan headquarters in Linkou, according to the company's chairman Barry Lam (林百里).

Lam said Quanta is focusing on developing artificial intelligence technology in a bid to become more competitive globally.

Notebook computer maker Compal Electronics Inc. is also making similar moves, starting with AI, augmented reality and 5G development, to better position itself in the global market, its president and CEO Martin Wong (翁宗斌) said.

Compal Electronics plans to increase its investment in Taiwan and Vietnam, optimizing its production by establishing smart manufacturing facilities, Wong said.

The U.S. and China have been locked in a trade war since last year, with the U.S. more than doubling its tariffs on billions of dollars' worth of Chinese goods, and China retaliating with higher tariffs on US$60 billion worth of American products.