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IPhone Manufacturer Pegatron To Start Operations In Batam In April

iPhone Manufacturer Pegatron To Start Operations In Batam in April

Taiwan’s electronic manufacturer, Pegatron Corporation will officially start operations in Batam, Riau Islands in April this year, following rental of a manufacturing plant in the designated economic zone. The general manager of Batam’s Batamindo Industrial Park, Mook Sooi Wah, confirmed the company would rent a two-hectare manufacturing plant in the park.

Pegatron, the maker of Apple’s iPhones, is planning to invest up to US$300 million in the long run with an initial investment of US$40 million, as confirmed by Batam Development Industrial Authority (BP Batam) chief Edy Putra Irawadi.

The US-China trade war has driven the company out of China into ASEAN countries, including Indonesia. Furthermore, the company announced a partnership contract with Batam-based listed electronics manufacturer PT Sat Nusapersada in December, for the purpose of assembling various electronic products to be exported in the US.

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Foxconn Considers Operation In Vietnam Amidst US-China Trade Tensions

Foxconn Considers Operation In Vietnam Amidst US-China Trade Tensions

Taiwan’s Foxconn technology group, the world’s biggest electronics contract manufacturer and a key Apple supplier has recently acquired the right to use a property in an industrial park in northern Vietnam. The company is reportedly considering setting up an iPhone manufacturing facility in Vietnam to mitigate the negative impacts of the ongoing US-China trade war.

Vietnam would serve as an additional production base to shelter operations from the trade tension and is one of the preferred locations as compared to India. According to Le Dang Doanh, the former economic adviser of the Vietnamese government, Vietnam has joined multiple trade pacts including the recently-ratified Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which would allow iPhones to be exported to many member countries with lower tariffs. Following an investment of US$5 billion in Vietnam in 2007, Foxconn could leverage on its existing operations in Vietnam to continue expansion of investments in the country.

However, Vietnam has a low number of supporting business and lower credit ratings as compared to India. Although high iPhone import tariffs due to the ‘Make in India’ policy might deter Foxconn from India, greater labour and English skills could make India a prime location as well.

Taiwanese companies have invested estimated US$31 billion in more than 2,530 projects in Vietnam, making them one of the top 10 investors of Vietnam.

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