News briefing

 

It is reported that Tripod is to acquire a Japanese-funded PCB factory in South Vietnam. The equity transfer will be completed in the near future. The acquired production capacity will be used for the production of multilayer PCBs for servers, with a total investment input of less than NT$200 million.

 

Impact analysis

 

The PCB products by Tripod are mainly multi-layered boards, whereas the estimated production capacity of this acquisition reported at this time is likely to contribute approx.NT$100 to NT$200 million in revenue on a scale per month. Also, if the average monthly revenue calculated in 2022 is approx.NT$5.5 billion on a scale, the potential production capacity in South Vietnam should only account for about 2 to 3% of the aggregate, which would be relatively close to the overall proportion of the overseas output value by Taiwanese businessmen outside Taiwan and the Mainland. The production capacity of Tripod is currently concentrated mostly in mainland China as, in the past, investments in Southeast Asia were mostly an issue of deliberation merely for evaluation, with no substantial investments being made. As such, if the acquisition is smooth, even though the company remains rather low-key for the time being, the project will surely help to create an additional novel milestone for Taiwan's PCB industry as it will create another stronghold for trade in Southeast Asia. Besides, although the proportion of the production capacity of the plant is not high, the scale is reckoned to be quite reasonable when weighing up the risk of being an initial investment in Southeast Asia.

 

Although Southeast Asia layout has been a hot and popular topic in recent years, most of the Taiwanese-funded factories or countries that are currently assessing their investments have concentrated most of their efforts in Thailand. Even though Vietnam is considered to have much potential, it is reckoned as an emerging area for the PCB industry chain of Taiwan. At this stage, another surfacing company with access will include TPT - its new factory is expected to start mass production in the second half of this year. The entry of Tripod or other potential PCB factories should help to balance the layout of Taiwan's factories in Southeast Asia which has already focused too much on Thailand, this being a relatively positive attitude. Besides, the deployment of Tripod focusing on South Vietnam as a contrast to investments mostly carried out in Thailand lately is considered to be rather rare. However, when investigating further, in terms of the distribution among customers by the industry, Vietnam is focused more on consumer electronics such as mobile phones and laptops, while the other PCB factories also include SEMCO, Young Poong, BHflex, Daeduck, Meiko, SUMITUBE, and other Japanese and Korean companies. As such, the country considering investments will have to deliberate many factors, and Vietnam has, in terms of objective conditions, more advantages than Thailand in terms of labor power and labor cost. Coupled with the gradual increase in the proportion of customer products in terms of production proportion in Vietnam, there may be opportunities to win the favor of more Taiwan-funded PCB companies for establishment.