Asian firms move production around region as China tariffs hit
SEOUL/TOKYOA growing number of Asian manufacturers of products ranging from memory chips to machines tools are moving production out from China to factories elsewhere in the region, with US President Donald Trump imposing tariffs on Chinese imports.
Companies including SK Hynix of South Korea and Mitsubishi Electric, Toshiba Machine and Komatsu of Japan have been plotting production moves since July, when the first tariffs hit, and the shifts are under way, said company representatives and otherinformed sources.
Others, such as Taiwanese computer-maker Compal Electronics and South Korea's LG Electronics, are making contingency plans in case the trade war continues or deepens.
The quick reactions to the US tariffs are possible because many large manufacturers have facilities in multiple countries and can move at least some production without building new factories.
Some governments, notably in Taiwan and Thailand, are encouraging companies to move work from China.
The US imposed 25 per cent duties covering US$50 billion (S$68 billion) of Chinese-made goods in July, and a second round of 10 per cent tariffs covering another US$200 billion of Chinese exports will come into effect next week.
At SK Hynix, which makes computer memory chips, work is on to move production of certain chip modules back to South Korea from China.
Like its US rival Micron Technology, which is moving some chip work from China to other Asian locations, SK Hynix does some packaging and testing in China, with the chips mostly made elsewhere.
Toshiba said it plans to shift production of US-bound plastic moulding machines from China to Japan or Thailand next month. The machines are used for making components such as automotive bumpers.
Mitsubishi Electric, meanwhile, said it is in the process of shifting the production of US-bound machine tools used for metal processing from its manufacturing base in Dalian, in north-eastern China, to a Japanese plant in Nagoya.
Some Asian governments hope for an economic and strategic boost from the trade war, with the Taiwanese government encouraging companies to move from China to South-east Asia. - REUTERS
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