Taiwanese contract electronics maker Pegatron Corp. said it has moved to Indonesia some manufacturing of networking products that have been hit by U.S. tariffs on Chinese imports.
The Apple Inc. supplier is also considering further diversification of its manufacturing bases to Vietnam and India to mitigate rising costs in China amid escalating tensions between Beijing and Washington, Chief Executive Officer Liao Syh-jang told reporters on Sunday.
“We have begun shipping from Batam island, Indonesia, in January,” Liao said. “Whether the U.S. will decide to go ahead with new tariffs on March 1 will be a key impact on the speed of the company’s further diversification.”
Liao said it’s unlikely that Pegatron will be able to churn out gadgets in Vietnam and India in 2019 since it will take two years to set up new plants. The company has also already moved some production lines back to the northern Taiwanese cities of Taoyuan and Taipei, he said.
The comments come amid ongoing efforts by Taiwanese companies to shift some manufacturing out of China. They are faced with Trump’s threats to eventually slap tariffs on all Chinese imports, even though no supplier has indicated that Apple is in a rush to diversify production from China.
On Saturday, Pegatron’s bigger rival Foxconn Technology Group said via a series of filings that it had injected some $213.5 million into an Indian unit and paid for rights to use more land in Vietnam.
