Taiwanese media: Taiwanese factories turning to Southeast Asia and India to establish a new supply chain

Source: Tiantian IC

    According to Taiwanese media reports, the trend of Taiwanese businesses building new world factories in Southeast Asia has gradually taken shape in recent years. In Vietnam, due to the government‘s preferential policies for investment promotion, and with the call of two major brand factories, Dell (Dell) and Apple (Apple), Taiwan‘s assembly factories including Quanta, Compal, and Yingyeda have all settled in; India has large factories such as Hon Hai, Heshuo, and Weichuang.

    According to the analysis of the general manager of a large electronic component factory, Thailand‘s direct costs are about 25% cheaper than China, but Thailand‘s production efficiency is 25% lower than China. Therefore, overall, the total cost difference is not significant. The current major problem is the relatively insufficient domestic manpower in Thailand, which requires foreign labor from countries such as Cambodia and Myanmar; Moreover, the supply chain of raw materials is not yet sound and expensive. Some raw materials still need to be purchased from China and transported to Southeast Asia in the early stages. However, he believes that with the experience of building a world factory in China over the past 20 years, the industrial chain in Southeast Asia can be improved within 5 to 10 years.

    In the past decade, the electronics industry in Taiwan, China, China has gradually shifted from the past PC industry to the layout of high value-added fields such as cloud, server, automobile, and medical care. The production base has also begun to increase the layout outside the mainland in response to customer and market demand. The trade and national security disputes between the United States and China have led many companies to seek to build more diversified supply chains, diversify risks, and strengthen production resilience.

    When enterprises redeploy the global supply chain, all countries offer subsidies, tax exemptions and other preferential measures to attract manufacturing demand transferred from Chinese Mainland.

    Dell, HP, Apple, and other major American laptop manufacturers have all accelerated the decentralization of their supply chains, requiring suppliers to significantly reduce the proportion of production in China to diversify risks. In particular, products supplied to the US market must be produced in non Chinese factories, with the goal of transferring 50% of their production capacity out of China by 2025. Dell has also expressed hopes to stop using chips made in China by 2024.

    In recent years, ODM (original factory commissioned design and manufacturing) companies such as Hon Hai, Heshuo, and Guangda have successively set up factories in India, Southeast Asia, and other places, mainly in response to the global planning of production capacity distribution for American customers. In addition to the fact that Asus and Hon Hai have already set up factories in India, Quanta recently announced that it will invest NT $1.536 billion to advance to Vietnam.

    Delta Power, a leading power plant, has also accelerated its global layout in recent years. In addition to the existing Chinese Mainland, Taiwan and Thailand, it has also added new construction in India, the United States, Europe and other regions.

    Building a new supply chain and diversifying global risks is a consensus among Taiwanese investors in mainland China. Although a complete industrial supply chain cannot be established in the short term, Taiwanese investors believe that with the experience of the past in mainland China, they believe that under the leadership of leading industrial enterprises and the evolution of Industry 4.0, if factories are more intelligent today, AI and intelligent manufacturing are expected to solve obstacles such as insufficient manpower and high costs. In the future, whether in Southeast Asia The emerging industrial chain in India is expected to reach a higher level in terms of speed and efficiency.