“If we feel there is any risk at all, we start diversifying. We have local assembly plants in countries like India and Indonesia, so if there are any issues, we can move to those plants.”
Acer, which has 7,725 employees and sales of NT$241.31 billion last year, joins other major Taiwanese tech developers in embracing what analysts see as a shift in recent years to South and Southeast Asia rather than expanding at home or in mainland China.
We will not retreat from China, but we will expand into Southeast Asia and South America. James Hsieh, AcBel Polytech
Over the past four decades, Taiwan's $130 billion high-tech industry has supplied the world with PCs, mobile phones and other consumer electronics devices and their components, including Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker.
“about [computer] “When it comes to laptop production, Vietnam and Thailand are currently the two most favored countries due to low labor costs, improving infrastructure and a growing domestic market,” said Sanesha Huang, an analyst at Taipei-based market research firm TrendForce.
“India is becoming even more attractive due to its rich talent pool and encouraging government policies.”
Taiwan's technology industry has been facing global political changes since the trade war between mainland China and the United States began in 2018.
U.S. law currently prohibits Taiwanese companies that sell sensitive parts to U.S. customers from making the same sales in mainland China, and at the same time, Taiwan's major tech companies are shifting their production bases outside of Taiwan to avoid a dispute with mainland China making parts less available to overseas customers.
Some shippers said those customers may be asking suppliers to relocate to Taiwan to avoid geopolitical risks and lower shipping costs.
“Every customer wants to have different manufacturers in different locations,” says James Hsieh, assistant vice president at PC power supply developer Akbell Polytech, which has a factory in China and is considering new investments in Southeast Asia. “We're not going out of China, but we're going into Southeast Asia and South America.”
Sygration, a 47-year-old Taiwanese automotive electronics system designer, is considering expanding into Vietnam, said Tony Wang, senior product manager. The company, which employs more than 600 people, already has two factories in mainland China and also has a U.S. factory running “just in case.” [American] The customer does not allow export. [mainland] China”.
“The client [mainland] “If it's China, we can make it in China, and if China wants us to make it in the U.S., we can make it in the U.S.,” Wang said, noting that the China-Vietnam border would provide a “geographical advantage” for transportation.
Before 2018, Taiwanese companies commonly chose mainland China as the location for building factories because of its relatively cheap land and labor, robust supply chains, and a large domestic market for product sales.
Thousands of Taiwanese companies across a wide range of sectors have pumped $60 billion worth of investment back into the island since 2019, Wang Mei-hua, Taiwan's former economic minister, told a U.S. think tank forum two years ago.
In a 2022 survey by the Center for Strategic and International Studies, more than 70% of Taiwanese companies cited potential risks from U.S.-China conflict and cross-strait conflict and said Taiwan needed to reduce its economic dependence on China.
Vietnam is valued for its low costs and new transport infrastructure. Taiwan has been investing in Vietnam for about 15 years, with $1.23 million in investment approved between January 2023 and April this year, according to Taiwan's Investment Review Department.
03:11
Mainland China begins blockade of Taiwan by People's Liberation Army three days after William Lai's speech
Mainland China begins blockade of Taiwan by People's Liberation Army three days after William Lai's speech
Taiwan's Quanta Computer signed a deal last year to start production in Vietnam, and iPhone assembler Foxconn Technology is already based in the country.
Thailand is known for its manufacturing infrastructure, pro-investment policies and skilled labor force. As of mid-2023, Taiwanese electronics companies have been approved for 20 projects with a total investment of 30 billion baht ($816 million), according to the Bangkok Post.
Across industries, Taiwan has received government approval to invest $959.82 million in Taiwan from 2021 through April this year, up from just under $70 million per year in all previous years.
India has attracted attention for its large, young and fast-growing market, abundant labor force and investment protection agreement with Taiwan. According to Taiwanese magazine Topics, as of last year, about 150 Taiwanese companies had operations in India, including electronics giants Foxconn, Wistron and Pegatron.
Taiwan has been approved to invest $5.6 billion in India in 2023 and the first four months of this year, compared with $2.8 billion in 2021 and 2022 combined, according to data from the Investment Review Bureau.
Companies with few employees and a limited product range often stay in Taiwan, according to executives at COMPUTEX this month. Staying in Taiwan gives them “quality control,” said Gary Hsu, manager at computer case-designer Guang Xing Industrial Co.
Companies with factories in mainland China don't necessarily want to leave; the market size remains the same and the supply chain is active. Angela Huang, an analyst at Taipei-based Market Information Consulting Institute, said mainland suppliers are selling some electronic components at “low prices” that are hard to find in Taiwan.
Approved investment by Taiwanese companies in mainland China in 2023 will reach about US$3 billion, the lowest level in 22 years.
“Recently, China has been competing aggressively with lower prices, leading Taiwanese brands to outsource some of their entry-level products to original design manufacturers in China to cut production costs,” said Angela Huang.
