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A supervisor holds an Apple iPad as he checks an employee's badge during roll-call at a Pegatron factory in Shanghai, China, in April 2016. File photo: Bloomberg

Taiwanese Apple partner Pegatron to set up production in Vietnam, as companies move to diversify from China

  • Taipei-listed Pegatron is said to have plans to set up production facilities in Vietnam, where it will make styluses for Samsung Electronics’s smartphones
  • An almost two-year-long trade war has pushed companies to seek alternatives to China to escape US tariffs

Taiwan’s Pegatron plans to set up production facilities in Vietnam, becoming the latest Apple assembly partner to establish a presence in the Southeast Asian nation as they diversify beyond China, according to people familiar with the matter.

Taipei-listed Pegatron is looking for a site to build a brand new facility in the north of the country, according to people familiar with the matter who asked not to be identified discussing private plans. It already has rented a separate facility in the northern city of Haiphong, they said. Pegatron will make styluses for Samsung Electronics’s smartphones there, one of the people said.

Pegatron joins Apple’s two other iPhone assemblers – Wistron and Hon Hai Precision Industry – in developing manufacturing facilities or building extra capacity in Vietnam. None of the three are making iPhones in Vietnam and have no imminent plans to do so. GoerTek is now making AirPods in the country, while two other Apple assembly partners Compal Electronics and Luxshare Precision Industry also have a presence in Vietnam.
An almost two-year-long trade war with the US has put China’s position as factory for the world of technology in jeopardy, undermining a decades-old global supply chain and pushing electronics companies to look for alternative production bases. Though Washington and Beijing have signed a phase one trade deal, supply-chain diversification is still essential in the longer term given tensions are unlikely to fully subside and labour costs are rising in China.
Taiwanese companies have been particularly active in their search for options, with companies from Inventec to Foxconn Technology Group either moving production back home or to further-flung regions around Asia, seeking to escape US tariffs.

Vietnam has been a top beneficiary from tariff-related trade diversions. Indonesia has also gained, including garnering investment from Pegatron.

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