Moving production lines out of China is uneasy

Taiwan-based electronic component supply chain makers have come under pressue to move production lines out of China in the wake of the US-China trade war and coronavirus pandemic, but they have claimed relocation is not easy mainly because of the high cost incurred.

If it is necessary to move production lines out of China, the top destinations will be Vietnam, Thailand, the Philippines or other Southeast Asian countries, with Taiwan being among possible choices, Taiwanese supply chain sources said, adding for most of the makers, North America and Europe would be impractical choices.

According to Kinpo Electronics, which has set up factories in Thailand and the Philippines for years, makers trying to establish factories in Southeast Asia face various local problems. For example, there has been short supply of labor in Vietnam, Kinpo indicated.

Establishing joint ventures with existing local clients may be an alternative, Taiwan-based supply chain makers said. However, this will run the risk of relying on single clients, they noted.