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Nov 19, 2018 / 15:54

Taiwanese tech giant ASUS ponders Vietnam for production relocation

US and China’s firms are looking at shifting production, assembly or sourcing of supplies to third countries, with Southeast Asia as the leading choice.

Vietnam is among a list of countries that Taiwanese tech-company ASUS is considering for the relocation of its Chinese production capacities, due to high tariffs imposed by the US on China-made goods, reported AnandTech website. 
Illustrative photo.
Illustrative photo.
In fact, the company already has production facilities in Taiwan, but the question is whether it has enough capacity to meet current demand for components, or will have to invest in expansion.

In addition to moving production facilities, hardware producers may need to switch to other suppliers of components. Right now, ASUS is considering the relocation of its own PC components manufacturing as an urgent matter. 

Moreover, if the company moves assembly of graphics cards and motherboards outside of China, it will also have to find new suppliers of small parts like capacitors, connectors, sockets, among others.

ASUS is a multinational company known for the world’s best motherboards, personal computers (PCs), monitors, graphics cards, routers and other high-quality technology solutions, it claims.

In 2017, the company was ranked 26th in Forbes’Global 2000 Top Regarded Companies, and named among the World’s Most Admired Companies by Fortune.

Economist Pham Chi Lan said Vietnam would benefit most if tech giants from North America, Europe and northeast Asia outsourced FDI from China to Vietnam, according to South China Morning Post. 

Previously, a survey of companies from both US and China, published by the Guangzhou-based American Chamber of Commerce (Amcham) in South China, showed that most survey participants are looking at shifting production, assembly or sourcing of supplies to third countries, with Southeast Asia as the leading choice.

Some companies are already putting such plans into motion. Panasonic, for example, is moving production of car electronics from China to Thailand, Malaysia and Mexico. China's GoerTek, which assembles wireless earphones for Apple, has notified suppliers that it intends to relocate some of its production to Vietnam. Chinese polyester producer Zhejiang Hailide New Material is investing US$155 million in a factory in Vietnam with an eye toward US exports.

Close to half of the companies in the AmCham survey reported feeling a trade impact beyond tariffs from the US-China confrontation. For example, 44% said that customs clearance for their shipments had slowed while 38% said that inspections had increased and that approval for licenses was taking longer.

The survey largely echoed the findings of a similar one conducted a few weeks earlier involving about 430 members of the American chambers of commerce in Beijing and Shanghai. The biggest difference was that nearly two-thirds of respondents to the earlier survey said they had no plans to shift manufacturing out of China despite the new tariffs.
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