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Monday, October 22, 2018
Memory Industry News
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Taiwan-based server motherboard makers to be pressured to leave China


Wednesday, October 10, 2018

Taiwan-based server motherboard makers are likely to be required by their clients to accelerate their plans to move production back to Taiwan or other sites outside China, according to industry sources.

Many Taiwan-based ODMs in the IT industry running production in China have already been making plans to move some of their manufacturing lines out of the country following the Trump administration's decision to impose extra tariffs on China-made products.

But their clients are likely to want them to speed up the relocation following a recent Bloomberg report that claimed China implanted spy chips on Supermicro's server boards made in the country, the sources said.

Companies named in the Bloomberg report, including Apple, Amazon and Supermicro, have all dismissed the spy chip claims.

The bulk of Supermicro server motherboards are manufactured by Taiwan-based ODMs' plants in China, and the US-based company accounted for a 11.7% share of the global server motherboard market in the second quarter of 2018, according to Digitimes Research.

According to Digitimes Research, Supermicro currently outsources 35% of its server motherboard orders to Shanghai-based Universal Scientific Industrial (USI), an affiliate company under the ASE Technology Holding; 30% to Wistron; and 20% to Orient Semiconductor Electronics (OSE). Supermicro makes the remaining15% at its own affiliate Compuware Technology.

Taiwan-based Wistron said it can make necessary adjustment in accordance with clients' demand as it has production bases in a number of locations globally. According to information available on the company's website, Wistron has production facilities in Czech Republic, Mexico and McKinney, Texas.

Taiwan-based Inventec, a major server motherboard supplier worldwide, said that it has actually kicked off an expansion project at its plant in Taoyuan, northern Taiwan since September in response to requests from its clients in North American asking the company to move part of its production back to Taiwan even before the trade war starting to escalate.

The first-phase capacity ramp-up at its Taoyuan plant is to complete in October, said the company, adding that it also has production lines in Mexico which can also be modified to meet changing situations.

Shipments to the US, mostly clients in the cloud datacenter sector, account for 20-25% of Inventec's total server motherboard shipments.

By: DocMemory
Copyright 2018 CST, Inc. All Rights Reserved

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