TAIPEI (Taiwan News) — Taiwanese businesses moving their production lines from China to Southeast Asia amid the U.S.-China trade war are now confronted with a new challenge — COVID-19 raging in the region.
Companies spanning the textile, shoemaking, and electronics industries have sped up the relocation of their operations away from China since 2017 to mitigate the impact of the conflict between the world’s two largest economies. Southeast Asia has been a preferred alternative, but lockdowns due to the pandemic have threatened to disrupt the supply chains again, reported CNA.
Among the affected are garment companies Eclat and Makalot, both of which have a significant presence in Vietnam. The factories in the country account for about 40% of the total output for the firms, but the resurgence of the virus has led to restricted operations and could hurt production for the third quarter.
Also feeling the heat is Taiwanese tech firm Walsin Technology Corp., a passive components manufacturer. The company’s plants in Malaysia have suffered as the country experiences an extended lockdown with daily cases soaring over 10,000. The companies have only recently received approval to work at 80% capacity, according to CNA.
Other tech firms operating in Southeast Asia such as Foxconn, Quanta Computer, Wistron, Inventec, and Compal have reported limited impact on their output thanks to increased vaccine coverage.
Since 2010, Taiwan-based companies have contributed to a combined NT$1.4 billion (US$501 million) investment in New Southbound countries, including Vietnam, Thailand, Indonesia, and the Philippines, wrote CNA, citing statistics by the Ministry of Economic Affairs.