Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents.
A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam.
A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly asked by SpaceX to transfer manufacturing abroad.
Photo: Reuters
Chin-Poon Industrial Co (敬鵬工業), a satellite component maker which said it was recently a SpaceX supplier, told reporters that the US company requested it move its manufacturing from Taiwan to Thailand for new orders “mostly due to geopolitical considerations.”
It did not elaborate.
The sources declined to be identified because the information was not public.
SpaceX did not reply to requests for comment.
SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year it is an “integral part” of China, drawing sharp criticism from Taipei.
China views democratically governed Taiwan as its own territory and has staged almost daily military drills around it over the past five years and has never renounced taking the island by force. Taiwan rejects China's sovereignty claims.
China's drills have increased in intensity since 2022, with the latest war games it carried out last month replicating a blockade of the island. Amid the potential for devastating disruptions to their supply chains, some Taiwanese companies in the strategic satellite and semiconductor industries are taking steps to reduce their reliance on domestic manufacturing.
A Vietnam-based investment adviser last month told reporters that SpaceX representatives said in a private meeting in March last year the company was interested in setting up a manufacturing hub for satellite equipment in Vietnam and sought advice on protecting intellectual property.
Asked about Taiwanese SpaceX suppliers moving abroad, the Ministry of Economic Affairs said that “short-term political factors should not affect the supply chain relationship between international satellite companies and Taiwan manufacturers.”
Taiwanese SpaceX supplier Wistron NeWeb Corp (WNC, 啟碁科技) this year began producing routers and other network gear for Starlink at its factory in the northern Vietnamese province of Hanam, about an hour south of Hanoi, two of the plant’s workers and a contractor said.
Wistron NeWeb’s expansion in Vietnam is largely due to orders from SpaceX, one of the workers said.
The Hanam factory plans to at least double its workforce of 3,000, the contractor and one of the workers said.
Outside the factory, several banners advertised job offers at the plant, reporters observed in the middle of last month.
WNC declined to comment, citing customer confidentiality.
Its latest annual report in April said: “In the face of geopolitical risks and ever-changing customer requirements, WNC has continued to expand its global manufacturing capabilities.”
Universal Microwave Technology Inc (UMT, 昇達科技), another SpaceX supplier and manufacturer of satellite components, invested in a factory in Vietnam this year, according to a Taiwanese official and public documents from the company.
UMT declined to comment on individual customers, citing confidentiality agreements, but said it was expanding its presence in Southeast Asia, including new factories in Thailand and Vietnam.
“The planning of overseas production capacity will help customers reduce their doubts about geographical risks, gain customer recognition and increase the breadth of cooperation with customers,” it said.
Taiwan has a large satellite industry, with about 50 companies producing ground equipment and sensitive components, according to the ministry and industry data.
The government estimates the sector’s output exceeded NT$200 billion (US$6.26 billion) last year.
SpaceX has about a dozen direct suppliers from Taiwan, which rely on dozens of domestic vendors, the source who collaborates with the local satellite industry said.
The Vietnamese government in September said that SpaceX wanted to invest US$1.5 billion in the country, although the timing and purposes of the actual investments remain unclear.
Shenmao Technology Inc (昇貿科技), a supplier of soldering materials for printed circuit boards that has provided components to SpaceX, in April said that it would spend US$5 million to set up a unit in Vietnam, without saying who its clients would be for products from that facility.
The company did not respond to a request for comment.
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