Pegatron Corp (和碩), one of Apple Inc’s iPhone assemblers, is to spend US$85 million to establish a new US subsidiary to meet customer demand for made-in-US products, after its board approved the plans on Friday.
The subsidiary would add new production capacity for servers and any products that customers request be made in the US to avoid potential tariffs, a Pegatron official told the Taipei Times by telephone yesterday.
US President Donald Trump on April 2 announced “reciprocal” tariffs for Taiwan and many other countries, which were later paused for 90 days.
Photo: Huang Wei-chieh, Taipei Times
The decision, announced on Friday in a regulatory filing, is part of Pegatron’s global expansion strategy, with the subsidiary expected to become one of its production bases, said the official, who declined to be named.
The company in March told an online earnings call that it planned to build a new server manufacturing facility in the US.
That would be the company’s second server production base in addition to its facilities in Taoyuan.
Regarding the location of the US subsidiary, Pegatron is weighing factors such as electricity costs, transportation and labor before making a final decision, co-CEO Gary Cheng (鄭光志) told reporters after the company’s shareholders’ meeting earlier this month.
The site would “likely be somewhere many of our peers have already set up factories,” Cheng said, responding to a question about whether it would build in Texas.
Aside from Pegatron, several Taiwanese electronics manufacturers, including Hon Hai Precision Industry Co (鴻海精密), Inventec Corp (英業達) and Wistron Corp (緯創), have announced plans to expand production capacity in the US to mitigate the potential impacts of tariff, with Texas emerging as the most popular location.
Inventec approved an investment of up to US$85 million in April to build a manufacturing base in Texas to support its artificial intelligence (AI) server shipments, while Wistron last month announced plans to spend up to US$50 million to acquire land and facilities in Dallas, Texas, for its high-performance computing devices.
Hon Hai has invested US$142 million in Houston, Texas, to expand its AI server capacity, it said in March.
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