Taiwanese tech giant wants to move production to Vietnam

Taiwanese tech company executives are indicating their intention to move production to Southeast Asia, especially Vietnam or Thailand.

Acer, with 7,725 employees and revenue of $7.47 billion in 2023, is joining the group of Taiwanese technology giants in the trend of shifting to South Asia and Southeast Asia in recent years - Photo: ACER

Vietnam is highly regarded for its low costs and developing transport infrastructure, according to SCMP .

Supply chains are shifting away from Taiwan

"The supply chain is moving out of Taiwan. They're going to Vietnam or Thailand or somewhere else. We're following the trend," Acer CEO Jerry Kao said in early June. As the world 's largest electronics maker, Acer is the fifth-largest personal computer (PC) vendor in the world by sales. "As soon as we see a risk, we start to diversify. We have local assembly facilities in countries like India and Indonesia, so if there's a problem, we can switch to those factories," Kao added. According to SCMP , Acer, with 7,725 employees and revenue of US$7.47 billion in 2023, is joining a group of Taiwanese tech giants that have been shifting to South and Southeast Asia in recent years, rather than expanding on the island or in China. For 40 years, Taiwan’s $130 billion tech industry has supplied the world with personal computers, phones, consumer electronics and components. “In laptop manufacturing, Vietnam and Thailand are the most favorable countries today due to lower labor costs, improving infrastructure and a growing domestic market,” said Sanesha Huang, an analyst at market research firm TrendForce.

SCMP newspaper commented that Taiwan's technology industry is facing global political changes that have arisen since the trade war between China and the US began in 2018. "India is also becoming more attractive with its abundant talent pool... as well as government incentives," expert Huang added.

Vietnam is highly appreciated

US law currently restricts China’s access to sensitive components. At the same time, Taiwanese companies are also trying to diversify production outside Taiwan, to avoid conflicts with China, making it difficult to export Taiwanese goods abroad. In addition, many companies say some customers may ask Taiwanese suppliers to relocate to avoid geopolitical risks and reduce shipping costs. Tony Wang, senior product manager at Sysgration, a Taiwanese automotive electronics system design company, said the company is studying how to operate in Vietnam. The 600-employee company has opened two factories in China and one in the US, Wang said, in case “our (US) customers do not allow us to export to China.” "If customers want the product to be made in China, we can make it in China, and if they want it to be made in the US, we can make it in the US," Wang added, pointing out that the China-Vietnam border could provide geographical advantages for shipments. SCMP said Vietnam is highly regarded for its low costs and developing transport infrastructure. According to the Taiwan Investment Review Agency, Taiwanese companies have invested in Vietnam for about 15 years, and were approved to invest $1.23 million between January 2023 and April 2024. Taiwanese electronics manufacturer Quanta Computer signed an agreement in 2023 to start production in Vietnam. Apple's iPhone assembly partner Foxconn Technology is also operating here. Meanwhile, Thailand is known for its manufacturing-related infrastructure, professional investment policies and skilled labor. As of mid-2023, Taiwanese electronics companies had been approved for 20 projects with a total investment of 30 billion baht ($816 million), the Bangkok Post reported.

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Source: https://tuoitre.vn/ong-lon-cong-nghe-dai-loan-muon-chuyen-dich-san-xuat-sang-viet-nam-20240613124457731.htm