Though US-China trade tensions seem to be easing, Taiwan ODMs are still moving ahead with their production deployments in Southeast Asia as they are requested by brand vendors to diversify manufacturing risks that may arise from persistent competition in tech domains, according to industry sources.

The sources said that Taiwan EMSs and ODMs including Foxconn, Compal Electronics, Wistron, Inventec and Pegatron are all busy relocating part of their production to Southeast Asia or South Asia from China, although they share the view that China remains their major manufacturing base given the availability of high-tech talent and complex electronics ecosystems.

Over the past six months, their brand vendors of diverse product lines including Bluetooth headphones, smart speakers, smartphones, notebooks, desktops and servers have asked them to move production to Southeast Asia to counter uncertainties associated with trade rows between the two leading economies, thanks to the region's sufficient supply of young populations, geographic proximity to both Taiwan and China, and easier access to local markets there. Among the ODMs, Compal Electronics is moving to renew the operation of its existing plant in Vinh Phuc Province, northern Vietnam to make notebook peripherals such as dockings, and will ramp up the ratio of its overseas production in Vietnam in the next 2-3 years, according to the firm's vice chairman Ray Chen.

Compal chairman Rock Hsu also noted that Vietnam will be his firm's top-choice overseas production base, given its status as the gateway of the ASEAN to the China market, as the ASEAN member state has signed the most FTAs with trade partners and has high export ratios after completing CPTPP and RCEP memberships.

Wistron is set to start volume production of notebooks at its existing plant in the Subic Bay, the Philippines in the first half of 2019 at the request of notebook vendors in the US.

Wistron is also planning to increase its production investment in India through its subsidiary Wistron InfoComm Manufacturing (India), with products involved including smartphones, PCs, IoT devices, and healthcare equipment.

Also, Inventec has reactivated its plant in Penang, Malaysia, while Pegatron is carrying out production deployments in Indonesia.

By: DocMemory
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