Electronics manufacturers are diversifying from the mainland, but it isn’t going to be fast or easy, warns the chairman of another Taiwan-based iPhone supplier with a global manufacturing network.
“The macroeconomy doesn’t look that great . I believe the whole industry will face pretty strong headwinds,” Lin said. “We need to consider how we can overcome that,” Lin said.
Now, he said, businesses like Wistron that create value by gathering up parts and putting them together increasingly need to build multiple locations around the world. Though Wistron can do the final assembly just about anywhere, Lin said, getting key components from its upstream suppliers is becoming more of a problem. “From our standpoint, a couple of difficulties will happen” with the new model, he said.
That could include a long-term commitment to buy parts that can be stored close to Wistron’s growing factory network. Yet that also involves more inventory planning by both. “They can build inventory nearby our plants, so we can all enjoy the so-called short supply chain. Then the difficulty is how to accurately project” demand, he said.
“We already have what I would say is the ‘first-phase preparation’ of a global footprint in different stages of readiness. For instance, in Mexico, we have a full operation. But we are just building our new factory in Vietnam and also just built another in Malaysia. That means that for these two regions, we probably aren’t at an infant kind of stage, but maybe are in primary school. It’s still an early stage.
But India has some differences from China. “About 20 years ago when we first went to China, we talked with the local government in China, we set up our factory, and then we had our operations in China,” he recalled. Government efficiency was quite strong during the time — China eagerly needed the investment “and was aggressive to do whatever they could do in order to speed up all of the processes.
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