The feasibility of Taiwan's PCB makers relocating production from China to Southeast Asia or elsewhere along with major downstream assemblers of electronics devices is quite low, according to supply chain sources.
The sources are responding to reports that PCB makers are mulling following in the footsteps of downstream assemblers such as Foxconn, Pegatron, Wistron, Quanta and Compal, which have reportedly been asked by Apple to assess the possibility of moving production out of China to mitigate the impacts of the US-China trade war.
But most PCB makers dismissed such reports, stressing that whatever decisions the ODMs may make in response to the Apple request, chances are extremely slim for PCB makers to move production from China.
They said there are many complicated problems setting up new production lines in Southeast Asia. Pollution, for instance, is a thorny issue that cannot be addressed without long-term negotiations with local residents and governments there, and the resultant cost will seriously drag down operation performances of PCB makers.
Moreover, China and Taiwan remain the best PCB production bases, whether measured by technical manpower supply or infrastructure stability. Accordingly, Taiwanese PCB makers will continue to base their production in Taiwan and China in the next few years, the sources said.
The sources said that chances are slim for upstream production of PCB materials to be moved to Southeast Asia, as the manpower quality there can hardly match the high specs of the materials needed by Apple. In contrast, the backend module assembly can be more easily relocated. Zhen Ding Technology, for instance, has set up a backend PCB modules assembly plant in India in line with Apple's efforts to support iPhone shipments to the India market, the sources said.
The sources said that even if assembly plants are moved to Taiwan or Southeast Asia, PCB makers with manufacturing operations in China can easily ship PCB modules there to support the relocated plants thanks to the availability of increasingly convenient transportation systems.
The only possibility is that PCB makers may move the highest-end product lines back to Taiwan to root advanced technologies in their home country while retaining production of lower-end board products in China.
Article translated by Willis Ke
