Virus outbreak set to trigger new wave of relocation for Taiwanese companies

Taiwanese factories in China among those affected by coronavirus, which appears hard to contain

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Foxconn

Foxconn (CNA photo)

TAIPEI (Taiwan News) — The coronavirus outbreak originating in China’s Wuhan has served as another catalyst for Taiwanese businesses to relocate from China after its prolonged trade conflict with the U.S. eases.

The 2019-nCoV outbreak, which has forced about 50 million Chinese into lockdown, is expected to deal a heavier blow to Taiwanese electronics companies based in China than did the 2002-2003 SARS epidemic. At that time, China had a significantly smaller presence in the industry, reported UDN.

The supply chain of electronic products is being disrupted, as factories in some seriously affected areas will not be allowed to reopen until mid-February. Taiwanese businesses bearing the brunt of the delayed opening are expediting the process of moving production out of the world’s second-largest economy to avoid the fallout from the incident.

Foxconn, for example, plans to boost its production outside China from its current 25 percent capacity. The electronics contract manufacturer has factories scattered around 16 countries, including Taiwan, the U.S. state of Wisconsin, Mexico, India, Vietnam, and other Southeast Asian countries, according to the report.

Taiwanese Telecommunications and internet service providers also appear vulnerable to the crisis, with more than 50 percent of their production generated in China. The extent to which their operations will be affected is still being gauged, wrote UDN.