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Taiwan’s Electronics Manufacturers To Leave China Due To Trump’s Tariffs

TAIWAN: Taiwanese electronics manufacturers are considering moving production back to Taiwan from key Chinese plants due to rising tariffs induced by the Trade War. Randy Abrams, Head of Taiwan research and regional semiconductors at Credit Suisse, has said “The tariffs imposed so far cover about 10 percent of all tech[nology] products. But many companies are clearly bracing for more in case this escalates further”.

As observed by Mark Li, an analyst at TrendForce, a technology research house in Taipei, key local electronics manufacturers such as Wistron Corporation and Quanta Computer are already considering a shift back to Taiwan due to tariffs driving up key component costs and restricting trade and exports. While the move by Taiwanese electronics manufacturer, Delta, to acquire its Thai subsidiary could be indicative of the company’s future plans to shift certain production pipelines to Southeast Asia.

Taiwanese electronics manufacturers are considering moving production back to Taiwan from key Chinese plants due to rising tariffs induced by the Trade War.

That being said, the shifting of manufacturing back to Taiwan could be hampered due to the shortage of domestic labour and higher production costs which could require the local government to relax labour migration laws. A trend that is also viewed In Thailand, where the labour market is tight. Although the converse is true for Vietnam, which has displayed potential in accommodating large production shifts from China.

Other Taiwanese industries that have been impacted by US issued tariffs include chip design houses due to a concentration of consumer gadget manufacturing being outsourced to China. Although in this case, manufacturing shifts are unlikely to occur as over 90 percent of smartphones and notebooks are still manufactured in China.

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