Concerns about tech security and COVID-19-related disruptions are propelling companies to move more production away from China, National Development Council (NDC) Minister Kung Ming-hsin (龔明鑫) said.
India and Southeast Asia are the major beneficiaries as more manufacturers try to create two separate supply chains to service Chinese and non-Chinese markets: “red” and “non-red,” Kung said in an interview last month, adding that the trend is accelerating.
“When the US first hit China with stiff tariffs, companies were still a bit hesitant about whether they needed to diversify their supply chains, but following COVID, they realized it is now necessary to shift their production elsewhere,” he said.
Photo: Chen Yi-ling, Taipei Times
China’s stringent COVID-19 policy led to sudden lockdowns, logistics bottlenecks and protests that disrupted production throughout the world’s biggest manufacturing nation. The sudden and sometimes months-long production halts drove home the risks of relying on a single country for global trade, prompting companies to seek other manufacturing bases.
One accelerant was Apple Inc’s projected output cut after workers’ protests turned violent at assembly partner Hon Hai Precision Industry Co’s (鴻海精密) iPhone complex in Zhengzhou late last year.
Since then, the world’s most valuable company has been pushing its suppliers to bolster their manufacturing capabilities outside China, adding more iPhone production capacity in India.
Concerns over tech security are also spurring companies and policymakers, Kung said.
More Taiwanese semiconductor companies might set up factories in India and Southeast Asia, instead of China, he said.
“India has concerns about IT security. It doesn’t want mature chips or low-end products all coming from China,” Kung said.
Even Chinese firms are seeking alternative sources of supplies to better fulfill overseas demand, he said.
“It’s not just Taiwanese companies that need to divide their supply chains,” Kung said. “Chinese companies need to do so too.”
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
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The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
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