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As ASE Technology and customers looking for contingency plans to back out of China


Tuesday, October 16, 2018

ASE Technology Holding and its customers have come up with contingency plans to counter possible impact from escalating US-China trade conflicts, but so far no customers have switched orders away from the firm or requested a "change of its position" in their supply chains, according to Tien Wu, chief operating officer (COO) of ASE.

Wu said that no business model can stay immune to undesirable variables such as the US-China trade war. Though it is difficult to predict how long the conflict will last and how fierce it will be, Wu continued, there is no need for businesses to be overly pessimistic about it, as global economic activities are not dominated by any single country but by terminal markets.

Industry sources said that as personal computers are involved in the US-China tariff war, related supply chains including semiconductor players have reportedly been affected by the ensuing hikes in terminal PC sales prices. But Wu opined that the impacts may not be clear until 2019.

Wu indicated that any supply chain change must be associated with business movement direction, and if customers insist on making changes, ASE is well prepared for that.

ASE now has about 100,000 employees around the world, including 600,000 in Taiwan, and all its footholds in Greater China, Singapore, Malaysia, Japan, South Korea and North American have discussed with major customers about strategies to deal with US-China trade row, according to Wu.

Wu disclosed that ASE has increased investment in its plant in Mexico, mainly to meet sharp increases in demand for semiconductor packaging services from the automotive electronics sector in North America, but not to cushion the US-China trade disputes.

ASE has maintained major investments in Taiwan, Wu stressed, adding that it has significantly increased investments in its Chungli plant in northern Taiwan and Kaohsiung plant in southern Taiwan.

Despite the US-China trade war, Wu indicated, ASE is guardedly optimistic about its future revenue growth prospects, given the increasingly booming semiconductor applications to the sectors of 5G mobile communications, AI, machine learning and automotive electronics.

By: DocMemory
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