TAIPEI (Taiwan News) — Compal Chair Chen Jui-tsung (陳瑞聰) said Thursday the company may shift some production to the US but without a local supply chain the costs will be steep.

Chen said after a shareholders’ meeting that Compal had joined the first two rounds of bidding for AMD’s ZT Systems server plant in the US but withdrew due to risk concerns, per CNA. The plant was awarded to a US buyer.

He explained the US lacks a local supply chain for computers, meaning materials and components would need to be imported, driving up logistics costs. Labor in the US, he added, is more than five times as expensive as in China or Vietnam, making production significantly more costly.

Chen noted the outlook on tariffs remains murky, especially with the 90-day exemption set to expire. A US trade court ruling Wednesday that Trump overstepped his authority on tariffs added to the uncertainty. “The scale of change in tariff policy is sometimes beyond imagination,” he said.

On Nvidia’s plan to base its Taiwan headquarters in Beitou-Shilin Technology Park, Chen welcomed the move, saying Compal is already in the chipmaker’s supply chain, per Liberty Times. He added that proximity could strengthen future partnerships.

Still, Chen said he was concerned about competition for AI talent. With surging demand in Taiwan’s server and AI sectors, firms are offering aggressive compensation to lure engineers. He said Compal will roll out new strategies to stay competitive.

Compal President Anthony Peter Bonadero said AI PCs made up 26% of last year’s shipments. While macroeconomic challenges persist, corporate device upgrades could buoy second-half performance. He added that server revenue, currently under 2%, is poised for double-digit growth this year.