Since the new Coronavirus Pneumonia epidemic has spread, it has caused a sudden shock for the technology industry, while Taiwanese electronics assembly, components, and Netcom manufacturers have stated that the epidemic is, again, providing another warning sign that Taiwanese factories should not be employing all their investments on a single production base. Even after the previous wave that saw companies moving out of mainland China as a result of the Sino-US trade war, it is expected that Taiwanese businessmen will increase their pace again in migration for investments as they head towards southeastern Asian countries or return to Taiwan to build more plants.

 

           According to the trade analysis, when the SARS epidemic outbreak occurred in 2003, China’s status in the global electronics industry was far from being as significant as it is today. Currently, China has closed cities and even villages in areas with severe outbreaks and has also postponed the resumption of work after the Chinese New Year holidays, which should seriously affect the electronics industry’s supply chain.

 

           Even before the US-China trade war, some Taiwanese factories had already begun their plans for production capacities that are outside of China. As a result of the impact of the coronavirus epidemic, the technology industry has also taken stock of its effective production capacity and will evaluate and speed up the deployment of their Taiwanese factories’ production capacity or respond to the condition with overseas alternatives.

 

           Regarding assembly, most Taiwanese businessmen have already increased their pace in transferring the supply chain. For example, the Foxconn group has already set up factories in at least 16 other countries, while 25% of its overseas production capacity that is outside of mainland China is expected to gradually increase in scale and customer demands. Liu Yang-Wei, the chairman of Foxconn, has announced in advance that the global factories will be dispersed to regional manufacturing centers in future and this is also why the group has made investment plans to set up plants in Taiwan, the State of Wisconsin (US), Mexico, India, Southeast Asia, and Vietnam.

 

           Pegatron also proposed a plan to invest NT$ 14.9 billion in Taiwan in 2019, which should be continuously executed this year, while Inventec has transferred part of its laptop and server products to Taiwan and some smart devices to Malaysia for production. As for Compal, the company expanded its factory to Vietnam last year, while Quanta announced that it would invest more in Thailand in 2020.

 

           Regarding the PCB factories, Taiwan’s largest PCB manufacturer, Apex-KY, has also increased its investment in Thailand, while Chin Poon has set up a production base in Thailand. The other remaining Taiwanese-funded PCB and IC substrate manufacturers have also successively finalized their expansion of projects for capital spending in Taiwan in 2019. Among these manufacturers, Unimicron plans for its capital expenditure to reach a record-high this year.

 

           As for the Netcom manufacturers, they have gradually expanded their production capacity in Taiwan in response to the US-china trade war, as well as in Southeast Asia and other regions. However, mainland China still accounts for approximately 50% of the production capacity. As regularly experienced by the industry, there will always be a shortage of workers after the Chinese New Year holidays. But in 2020 in particular, the starting date of work was delayed because of the impact of the new Coronavirus Pneumonia and the workers returning from Hubei and other regions that had to be quarantined for 14 days. Consequently, the date in which workers are expected to return to the production line is hard to tell (News source: Economic Daily News).