Major electronic OEM plants in Taiwan have, in sequence, planned to invest in Taiwan and Southeast Asian countries as a result of being affected by the US-China trade war. This strategy was first led by Pegatron as it returned to Taiwan for investment. Thereafter, OEM plants such as Quanta, Inventec, and Compal have also returned to Taiwan for investment to avoid any loss incurred from the trade war.

 

           According to insiders of the trade, these OEM plants have, in the past 20 years, gradually moved their production capacity to mainland China. As a result, there is hardly any more assembly capacity left in Taiwan. These OEM plants are now unexpectedly bringing the production capacity back to Taiwan 20 years later. Still, some insiders also bluntly said that the status of mainland China as the global production base for electronic products is unlikely to be replaced in a short period and only a few OEM plants can truly be capable of moving a large number of their production lines out of mainland China.

 

        However, since everyone is unaware of when the trade war will accurately come to an end in the face of the trade confrontations, Taiwanese OEM plants can only continue to plan ahead.

 

        Pegatron, the world's second-largest electronics OEM plant and the top-ten Taiwanese companies for export to the US from China, announced in May that they will accelerate their construction of R&D centers in Guandu to aggressively adjust the plant’s production capacity, as well as to strengthen vertical integration to spread the associated risks. However, Pegatron had purchased manufacturing plants in Hsintien to produce high-value-added products such as loT sensors and further increased new production lines and automation equipment at the two existing production bases in Guishan of Taoyuan.

 

           Pegatron also indicated that they should increase the proportion of manufacturing in Taiwan and turn the country into a three-in-one base for design, manufacturing, and service. In recent days, the investments by Pegatron, after returning to Taiwan, reached NT$14.9 billion, which could create more than 1000 job opportunities.

 

           Quanta has just announced this month that it is planning to build the third production building at the Linkou headquarters while spending no more than NT$950 million. The company will also spend 1 billion Baht (about NT$1 billion) to set up a Thai subsidiary as the company’s production base for the Southeast Asian area.

 

           According to supply chain sources, the reason that Quanta expanded its production in Taiwan is mainly that they want to set up an AI (artificial intelligence) R&D center to meet the demands of high-end servers and other products. As for setting up a production base in Thailand, the main purpose is to respond to the needs of its major client, HP, to transfer the production capacity for the notebook product.

 

 

        Weng Zong-Bin, the General Manager of Compal, said recently that Compal has already moved some of its notebook production lines back to Taiwan and if the trade conflicts continue, the company will consider increasing its investments in Vietnam. (News source: Economic Daily)