This is a super piece on how cold calculations – rather than national or ethnic identity – drive FDI. As China’s trade war with America rumbles on, Taiwanese entrepreneurs who set up factories in China 30 years ago are reconsidering their commitment to China. “Today, four Taiwan-based companies—Foxconn Technology Group, Inventec, Quanta Computer, and Compal—together account for some 40% of exports from China to the U.S. of computers, phones, and related items. But faced with growing trade tensions and U.S. tariffs, the leaders of those companies are reconsidering their commitment to China. Although any pivot away from the country is just starting, factories that leave won’t come back anytime soon.”
The four entrepreneurs with giant companies who will determine the flow tech FDI in Asia are:
Terry Gou, the Founder of Foxconn. “Key products: Apple iPhone, Amazon Kindle, Google Pixel. Signs of change: Expanded Indian manufacturing of older-model iPhones; building a plant in Wisconsin…Foxconn is the world’s biggest electronics contract manufacturer, with facilities in more than 30 Chinese cities and in 14 other countries.”
Yeh Kuo-I, the Founder of Inventec. “Key products: HP laptops, Apple AirPods, Google servers. Signs of change: Plans to move production of laptops for the U.S. market to Taiwan by December. Yeh is a key backer of Taiwanese tech companies…Yeh had offered to convert an orchid-growing facility in Vietnam into an Inventec factory to skirt U.S. tariffs…Inventec has shifted some production of small appliances to Malaysia and has said it will move manufacturing of U.S.-bound laptops to Taiwan.”
Barry Lam, the Founder of Quanta Computer. “Key products: Apple MacBook, Apple Watch, Amazon and Google servers. Signs of change: Expanding capacity in Taiwan and looking at locations elsewhere in Asia….e’s bought a factory adjacent to a Quanta facility in the northern Taiwanese city of Taoyuan, where he’ll make what he calls “premium products”—likely servers and high-end laptops. He’s also scouting locations in Southeast Asia and expanding a 7-year-old data center business in the U.S. On Friday, Lam’s company announced it would be setting up a Thai subsidiary — its very first in Southeast Asia.”
Ray Chen, Chairman of Compal Electronics. “Key products: HP and Dell laptops. Signs of change: Adding notebook-manufacturing capacity in Taiwan and considering further investments in Vietnam…Today, Compal is looking back home, with a new factory in Taoyuan and expansion of a plant nearby. After Trump introduced his tariffs, Compal began making networking gear in Vietnam, and the company says it may add other products to its facilities there.”
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
Copyright © 2022 Marcellus Investment Managers Pvt Ltd, All rights reserved.
Get weekly insights on our investment strategies and more...