Illustrative photo. (Source: VNA) In a story published on May 26, the news platform said manyTaiwan-based suppliers intend to meet increasing capacity demand by relocatingmanufacturing to Southeast Asia and building new industrial clusters there totap the demographic and geographic advantages as well as rapidly growing marketdemand in the region.
“They look to replicate their experiences in China andmake Southeast Asia the next world factory that will support rising needs asthe global supply chain makes transitions to accommodate "G2" (US vsChina) developments.”
Some suppliers note that manufacturers choose to buildnew production bases in Vietnam and Thailand in part for their transportinfrastructure, it explained. Being able to transport goods via their roadnetworks will make up for the incomplete supply chain ecosystems in Vietnam orThailand.
It also added that the shift to regional manufacturinghas given rise to the new trend – short supply chains. The supply chains inVietnam and Thailand are near completion after years of effort. Furthermore,component suppliers' added demand in recent years are largely for automotiveand home appliance parts, rather than ICT devices and applications, whichallows them to better connect with Thailand's local industry development.
Vietnam and Thailand are therefore the ideal choices forTaiwan-based suppliers foraying into Southeast Asia, followed by Malaysia,Indonesia, and the Philippines, the article said.
Many suppliers indicate that the COVID-19 pandemic hasforced them to put off or suspend their plans to move into Southeast Asia.
Digitimes Asia cited industry observers as saying thatwhen the suppliers strategize about building new production bases in SoutheastAsia, aside from customer requirements and supply chain considerations, theyshould also gain an understanding of what preferential treatments andinvestment incentives Southeast Asian governments may be putting forward toattract manufacturers looking to set up production outside of China./.
VNA
