Contract electronics manufacturer Wistron Corp (緯創) last week said that it plans to purchase land in Vietnam, as the company continues to gradually shift production to Taiwan, India and the Philippines to diversify risk.
The 232,087.74m2 lot the company aims to secure is in the Dong Van III Industrial Zone in Ha Nam Province in northern Vietnam, Wistron said in a regulatory filing.
The transaction would total 337.4 billion dong (US$14.6 million), Wistron said.
The company did not provide additional details on the purchase, which remains subject to approval by the board of directors at a meeting next month.
Wistron, an assembler of Apple Inc’s iPhones, also manufactures notebook computers, PCs, tablets, game consoles, servers, monitors and LCD TVs for clients on a contract basis.
Wistron might build a factory to produce information technology-related products in Vietnam, the Chinese-language United Evening News reported on Wednesday, without citing sources.
The company might initially focus on displays and expand to laptops, the report said.
Credit Suisse Group AG’s equity research team said in a report on Wednesday that Wistron’s latest round of spending in Vietnam is aimed at providing an alternative option for its key US notebook computer clients in the long term, as it aims to start mass production beginning late next year or 2021.
In addition, the Vietnam location might offer better logistics and labor compared with its Philippine site, which could help improve the company’s performance margin in the long term, Credit Suisse said.
Wistron chairman Simon Lin (林憲銘) previously said that, in response to the US-China trade dispute, the electronics industry would shift production out of China to mainly Southeast Asia, but firms would not focus on a certain country or region and it would also be difficult to form industrial clusters such as those in China’s Kunshan or Chongqing.
Wistron also has manufacturing facilities in Mexico and the Czech Republic to support server production, but the company’s production remains largely based in China.
Other Taiwanese contract electronics manufacturers — such as Compal Electronics Inc (仁寶電腦), Quanta Computer Inc (廣達電腦), Pegatron Corp (和碩), Inventec Corp (英業達) and Hon Hai Precision Industry Co (鴻海精密) — that have plants in China have also been shifting some of their production to Taiwan, India, Southeast Asia and the US to avoid high US tariffs imposed on products made in China.
Compal, for instance, has completed setting up and expanding capacity in Taiwan and Vietnam to sufficiently meet demand for notebook shipments to the US.
Quanta has focused on Taiwan and Thailand, and Inventec on Taiwan and Malaysia to diversify their supply chains, Credit Suisse said.
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