Market news Aug 17 22

Pegatron looks to expand in Vietnam

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Taiwan-headquartered Pegatron, which makes about 20-30% of iPhones, is putting an emphasis on expanding its factories out of China, which began pandemic-related lockdowns in several cities this April.

“We faced Covid controls for two months. We couldn’t have assessed that in advance, so that makes me emphasize our expansions in Vietnam, India, Indonesia, and North America, to solve our labour shortage, the gap between peak and low seasons, and to increase the utilization of our production capacity,” Pegatron president Liao Syh-jang was quoted by Reuters as telling an annual shareholder meeting Wednesday in Taipei.

The Apple assembler in April suspended operations at its Shanghai and Kunshan plants in mainland China due to Covid-19 lockdowns, affecting production and deliveries.

iPhone 13 products. Photo courtesy of the brand.

In recent years, Pegatron has been seeking to expand production in Southeast Asia and North America. In September 2020, the Taiwanese major announced its plans to invest $1 billion in three hi-tech product factories in northern Vietnam, located in Nam Dinh Vu Industrial Park in Hai Phong city to make computers, electronic devices, communications equipment, electronic components and circuit boards for global tech giants. The first plant is already operational.

Also in Hai Phong, the Apple, Microsoft, and Sony supplier got a license this February to build a $68.3 million housing project in Dinh Vu-Cat Hai Economic Zone for its workers. It is designed to accommodate 10,000 employees.

Taiwanese firm Foxconn, the world’s largest contract electronics maker that also assembles iPhones, made its foray into Vietnam in 2007 and had invested $1.5 billion as of December 2020. Foxconn injected another $270 million in January last year to expand its laptop and tablet assembly capacity in the country. The major currently employs about 60,000 people in the country.

Apple does not have a plant in Vietnam but the Southeast Asian country is the American giant’s largest manufacturing base outside mainland China via its suppliers, including Foxconn, Pegatron, Luxshare, Goertek, ASE Technology, and Wistron. Luxshare is producing AirPods, BYD is preparing to make iPads, while Goertek is embracing bold expansions in the north.

Also in northern Vietnam, U.S.-based Amkor Technology Inc., a global semiconductor product packaging and test services provider, is investing as much as $1.6 billion until 2035 to build a state-of-the-art facility as an important part of the major’s worldwide network.

American giant chipmaker Intel has so far invested $1.5 billion in Vietnam since its 2006 inception here, making it the largest U.S. technology investor. The corporation has plans to enlarge business and investment in Vietnam, Intel CEO Patrick Gelsinger told Vietnamese Prime Minister Pham Minh Chinh on May 27 in Hanoi.

“Vietnam is an attractive destination for foreign investors as this is a dynamic economy and a promising market,” Gelsinger said.

At present, Ju Teng International Holdings Ltd., a global supplier of casings products for notebook computer manufacturers, original equipment manufacturers and original design manufacturers, is preparing to start construction of its $200 million large-scale factory in Nghe An province, central Vietnam.

The factory, on a 120-hectare site in Hoang Mai 1 Industrial Park, will make electronic device casings and automobile accessories. Trial operation is set for April 2023, followed by official production scheduled for October the same year.


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