Vietnam or other ASEAN states, and India could become the next manufacturing hubs of Taiwanese firms over the next one to two decades, especially after Apple Inc reportedly told its major contract manufacturers to boost capacity outside China to avert risks of production disruptions.
Apple is a key client of many Taiwanese manufacturers, which assemble iPhones, iPads, MacBook laptops and airPods in China or supply components for those gadgets. Some of Apple’s suppliers and manufacturing partners had to suspend production this month to comply with China’s “zero COVID” policy and strict restrictions to curb the spread of the virus in Shanghai.
Those measures led to a dip in revenue and shipments, as well as a spike in logistics costs, and the impact could last a bit longer before moderating as the port city reopens and production gradually resumes.
As more arbitrary and capricious actions from the Chinese government might be expected, Taiwanese manufacturers are seriously considering a major realignment of their manufacturing capacity to minimize operating risks.
That is a reverse of the manufacturing diversification inertia seen in the past. Large-scale manufacturers have taken advantage of China’s low-cost labor and comprehensive supply chains, as those two factors are crucial to making a profit from the low-margin business of hardware assembly. As building new supply chains elsewhere is a challenging and time-consuming task, they preferred to stay in their comfort zone rather than face new risks.
When President Tsai Ing-wen (蔡英文) took office in 2016, she launched the New Southbound Policy — ticking off a list of countries that Taiwanese companies were encouraged to invest in to reduce their reliance on China. Local enterprises were not quick to embrace the policy. Presently, about 90 percent of Apple products are still made in China, based on the calculations of TF International Securities analyst Kuo Ming-chi (郭明錤).
However, with China’s investment environment undergoing significant changes because of the COVID-19 pandemic, the prolonged US-China trade dispute and Beijing’s crackdown on Chinese technology and financial giants, large-scale Taiwanese companies have been exploring other manufacturing hubs. This would be the biggest shift by Taiwanese firms after spending 30 years building their Chinese capacity.
iPhone assemblers Hon Hai Precision Industry Co and Pegatron Corp make iPhones in India, but only to supply the local market. Hon Hai said it is quickening expansion in India to match the pace of global peers. It is also investing in Southeast Asian countries, including Vietnam and Thailand.
Vietnam looks high on the priority list of Apple’s manufacturing partners to add new production, as Chinese companies that make AirPods have early on reportedly set up manufacturing in Vietnam.
Taiwanese companies have said it would be a big challenge to duplicate their Chinese production in other countries. Hon Hai said it would take at least three to five years to reach productivity similar to what it has in China now.
With the latest push from Apple, it has become an inevitable trend for Taiwan’s Apple suppliers and manufacturing partners to boost new capacity in countries other than China. With small-scale capacity already installed in India and Vietnam, it is no surprise that those two countries have a good chance of overtaking China and becoming the new manufacturing bases for Taiwanese firms.
The US Senate’s passage of the 2026 National Defense Authorization Act (NDAA), which urges Taiwan’s inclusion in the Rim of the Pacific (RIMPAC) exercise and allocates US$1 billion in military aid, marks yet another milestone in Washington’s growing support for Taipei. On paper, it reflects the steadiness of US commitment, but beneath this show of solidarity lies contradiction. While the US Congress builds a stable, bipartisan architecture of deterrence, US President Donald Trump repeatedly undercuts it through erratic decisions and transactional diplomacy. This dissonance not only weakens the US’ credibility abroad — it also fractures public trust within Taiwan. For decades,
The government and local industries breathed a sigh of relief after Shin Kong Life Insurance Co last week said it would relinquish surface rights for two plots in Taipei’s Beitou District (北投) to Nvidia Corp. The US chip-design giant’s plan to expand its local presence will be crucial for Taiwan to safeguard its core role in the global artificial intelligence (AI) ecosystem and to advance the nation’s AI development. The land in dispute is owned by the Taipei City Government, which in 2021 sold the rights to develop and use the two plots of land, codenamed T17 and T18, to the
The ceasefire in the Middle East is a rare cause for celebration in that war-torn region. Hamas has released all of the living hostages it captured on Oct. 7, 2023, regular combat operations have ceased, and Israel has drawn closer to its Arab neighbors. Israel, with crucial support from the United States, has achieved all of this despite concerted efforts from the forces of darkness to prevent it. Hamas, of course, is a longtime client of Iran, which in turn is a client of China. Two years ago, when Hamas invaded Israel — killing 1,200, kidnapping 251, and brutalizing countless others
Taiwan’s first case of African swine fever (ASF) was confirmed on Tuesday evening at a hog farm in Taichung’s Wuci District (梧棲), trigging nationwide emergency measures and stripping Taiwan of its status as the only Asian country free of classical swine fever, ASF and foot-and-mouth disease, a certification it received on May 29. The government on Wednesday set up a Central Emergency Operations Center in Taichung and instituted an immediate five-day ban on transporting and slaughtering hogs, and on feeding pigs kitchen waste. The ban was later extended to 15 days, to account for the incubation period of the virus
RSS