From iPhones to computers, the manufacturing powerhouses behind much of the world’s electronics are preparing to move chunks of production away from China and toward such locales as Eastern Europe, Mexico and Southeast Asia.
Foxconn Technology Group Chairman Terry Gou — who became a billionaire by dint of making Apple Inc.’s gizmos — started the ball rolling when he opened a $10 billion display plant in the heart of America, a move that now seems prescient. As tensions between the world’s two largest economies escalate, a growing cohort of his Taiwanese peers have drawn up plans to shift production abroad or devising contingencies for costly new facilities.
Taiwan’s largest corporations form a crucial link in the global tech supply chain, assembling devices from sprawling Chinese production bases that the likes of HP Inc. and Dell then slap their labels on. In the past week, corporate leaders, including the chief executives of Pegatron Corp. and Inventec Corp., declared on earnings calls they’ve come up with ways to mitigate the impact of a trade war. While Donald Trump hasn’t zeroed in on consumer electronics, the fear is they’ll be included among the next $200 billion of Chinese-made goods — wiping out already razor-thin margins in the process.