Taiwan's Leading EMS Makers Move to Set up Production Lines in Vietnam

Taipei, April 11, 2008 (CENS)--In light of cheap labor in Vietnam, Taiwan's large-sized suppliers on an EMS (electronics manufacturing service) basis, including Hon Hai Group, Compal Electronics Inc. and Wistron Corp., have gradually moved to build production plants there, according to company sources.

While most Japanese and Korean makers have moved to Vietnam due mainly to their strong optimism about the future of the market, most Taiwanese companies are relocating to the Southeast Asian country to take advantage of low cheap labor there, which is still 40% to 50% lower than in China.

At the moment, Hon Hai Group has activated its production plant in Vietnam since last August, and planned to build new ones in Vietnam's Bac Ninh Province, Bac Giangi Province and Vinh Phuc Province. The group has acquired 1,000 hectares of land in Vinh Phuc as a Taiwanese supplier with the largest manufacturing base in the province.

Noteworthy is that Hon Hai has placed great efforts in Vinh Phuc Province because the province is quite close to China's Guangxi Province where the group has had a plant. Thanks to such a geographic factor, the group and its subcontractors, after its plant in Vinh Phuc is completed, can take advantage of an economic route between the two places to effectively transport semi-finished products from Guangxi to Vinh Phuc within a day in the future. Furthermore, they can be exempted from custom duties imposed on exports from Vietnam to other countries.

On the other hand, Compal has bought 326 hactares of land space in Vinh Phuc Province, while Wistron and Chi Mei Optoelectronics Inc. have planned to jointly set up an industrial park in the same province. These moves are expected to cluster more Taiwanese companies and form integral supply chains there.

Compal has kicked off construction of its production base in Vietnam since the end of last November, which is scheduled for completion in the fourth quarter of this year and mass production in the first quarter of next year. To meet Compal's construction schedule, its related subcontractors will also settle their production lines in the base by the end of this year, when there will be a total of over 2,000 workers there.