US tech giants including Apple, Facebook and Google reportedly are mulling expanding test production of new products in Taiwan, whose advantages in the IT manufacturing sector have been highlighted by US-China trade war and the coronavirus outbreak, according to industry sources.
Many US heavyweight consumer brands have relocated part of production lines from China to Southeast Asia and Taiwan since the trade war started in mid-2018. Taiwan in particular has become a crucial destination for their production diversification thanks to its outstanding achievements in containing the spread of the coronavirus, the sources said.
The sources said US brand vendors are not expecting Taiwan, plagued by labor shortages, to replace China as an alternative base for volume production, but instead are hoping Taiwan to become their test-production foothold for new products.
Brand vendors used to carry out engineering tests and trial manufacturing of new products in China thanks mainly to supply chains clustering there ranging from components suppliers to assemblers, and partly to easier arrangements of on-errand trips for their engineers and business staff.
But such tests and production in China have been seriously affected by vendors stopping sending engineers there in the wake of the outbreak.
Apple's assembly plants in China were originally scheduled to enter engineering verification test (EVT) stage in early February for its 5G iPhone, but the vendor has not sent any engineer to China so far, the sources said. As a result, mass production for the new device will be delayed for at least one month from its original schedule in second-half 2020, the sources said.
The epidemic is easing in China, but US and European firms are still unable to send engineers to the country due to travel restrictions and lockdowns, the sources noted.
Though US brand vendors are eyeing Taiwan as a new test production center for their new products, it remains to be seen whether Taiwan's local suppliers and labor supply can support it, the sources said.
Article translated by Willis Ke
