Pegatron Corp (和碩) plans to invest US$150 million to set up a Vietnamese unit this year to make electronics, it said in a regulatory filing yesterday.
The contract electronics manufacturer is one of Apple Inc’s iPhone assemblers.
The announcement ended months-long media speculation about the location of the company’s second manufacturing site in Southeast Asia.
The move was part of “production allocation efforts by Pegatron to cope with customers’ concern over the US-China [trade] spat,” a Pegatron official speaking on condition of anonymity said by telephone.
The investment plan is still in an early stage, and Pegatron has yet to decide what kind of products it would make at the facility and for whom, the official said, dismissing media speculation that it might make smart speakers for Google.
The company could set up a new manufacturing plant, rather than lease an existing one as reported by local Chinese-language media, the official said.
Pegatron hopes to launch the project this year, as it has been lagging behind its local peers in building manufacturing capacity in the country.
The company is holding discussions with local governments in Vietnam and seeking comments from its customers to finalize the location of the facility, as well as other details, the official said.
Pegatron built its first Southeast Asian manufacturing site in Batam, Indonesia, last year, which makes networking and communications products, the official said.
The products contributed 61 percent to Pegatron’s revenue, which totaled NT$355 billion (US$11.81 billion) in the third quarter of last year.
“We are continually scouting for new sites in Southeast Asia in a bid to diversify production bases,” the official said.
India could host the company’s third manufacturing site in South and Southeast Asia, as Pegatron chief executive officer S.J. Liao (廖賜政) in November last year said that it was evaluating the feasibility of relocating production from China to Vietnam and India.
Two other iPhone assemblers — Hon Hai Precision Industry Co (鴻海) and Wistron Corp (緯創) — last year set up iPhone assembly lines in India.
Pegatron last month posted revenue of NT$95.65 billion, the weakest in seven months and down 22 percent annually from NT$122.64 billion. On a monthly basis, revenue fell 25.68 percent from NT$128.7 billion.
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