Japan incentivizing its companies to shift manufacturing facilities out of China and adding Bangladesh to a list of preferred destinations for relocating the factories might give the nation’s economy a boost.
“As the COVID-19 pandemic started in China, Japanese companies needed to diversify” their supply chains further, Japanese Ambassador to Bangladesh Naoki Ito said in an interview. “This will provide an opportunity for Bangladesh.”
Japan’s nudge to relocate companies comes at a time when a special economic zone (SEZ) is being developed in Bangladesh to attract Japanese firms’ production facilities.
The industrial zone sprawling on 405 hectares in the Araihazar sub-district, 32km from the capital Dhaka, is expected to bring in US$20 billion in Japanese investment, the Bangladesh Economic Zones Authority said.
For years, Japanese manufacturers have sought lower labor costs and supply-chain diversification by moving some output out of China, as wages rose and infrastructure in countries like Vietnam and Bangladesh improved.
Over the past 10 years, the number of Japanese companies operating in Bangladesh has tripled to about 300, Ito said.
Japan has allocated US$350 million in special loans to set up the US$1 billion industrial zone, making it the largest such assistance for an SEZ in Asia, Ito added.
The Araihazar Industrial Park, which is to be operational by next year, is seeking to draw new investments from automakers, such as Suzuki Motor Corp and Mitsubishi Corp, Ito said.
Japan Tobacco Inc and Honda Motor Co are so far among the largest Japanese investors in Bangladesh.
The nation occupies a geographically strategic location linking South Asia and Southeast Asia, and Japan is planning a 177.77 billion taka (US$2.1 billion) deep-sea port on Matarbari Island.
One of the world’s most populous countries, Bangladesh has 160 million people residing in a land area that is about 40 percent of Japan.
Bangladesh’s economy, which grew an estimated 5.2 percent in the year ended in June last year, is expected to expand 7.4 percent in the current financial year.
While that is slower than the 8.2 percent pace previously forecast, it still puts the nation ahead of regional peers on the growth metric.
The country nestled between India and the Bay of Bengal is a destination with “good and strong” prospects for Japanese companies, Ito said.
“The pace of recovery is faster in Bangladesh, compared with neighboring countries,” Ito added.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its materials management head, Vanessa Lee (李文如), had tendered her resignation for personal reasons. The personnel adjustment takes effect tomorrow, TSMC said in a statement. The latest development came one month after Lee reportedly took leave from the middle of last month. Cliff Hou (侯永清), senior vice president and deputy cochief operating officer, is to concurrently take on the role of head of the materials management division, which has been under his supervision, TSMC said. Lee, who joined TSMC in 2022, was appointed senior director of materials management and
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
MAJOR CONTRIBUTOR: Revenue from AI servers made up more than 50 percent of Wistron’s total server revenue in the second quarter, the company said Wistron Corp (緯創) on Tuesday reported a 135.6 percent year-on-year surge in revenue for last month, driven by strong demand for artificial intelligence (AI) servers, with the momentum expected to extend into the third quarter. Revenue last month reached NT$209.18 billion (US$7.2 billion), a record high for June, bringing second-quarter revenue to NT$551.29 billion, a 129.47 percent annual increase, the company said. Revenue in the first half of the year totaled NT$897.77 billion, up 87.36 percent from a year earlier and also a record high for the period, it said. The company remains cautiously optimistic about AI server shipments in the third quarter,
Nvidia Corp CEO Jensen Huang (黃仁勳) on Thursday met with US President Donald Trump at the White House, days before a planned trip to China by the head of the world’s most valuable chipmaker, people familiar with the matter said. Details of what the two men discussed were not immediately available, and the people familiar with the meeting declined to elaborate on the agenda. Spokespeople for the White House had no immediate comment. Nvidia declined to comment. Nvidia’s CEO has been vocal about the need for US companies to access the world’s largest semiconductor market and is a frequent visitor to China.