at the time, saying, “If it had been southern Vietnam, which was much farther away from China’s supply chain, the timing of the shipments would no
at the time, saying,
“If it had been southern Vietnam, which was much farther away from China’s supply chain, the timing of the shipments would not have worked.”
Consequently, Hon Hai bought more than 400 hectares of land in Bac Ninh that included space in the future for upstream suppliers in the supply chain. The company’s plans to build a new facility there were temporarily derailed, however, when the global financial crisis undermined the world economy in late 2008.
Twelve years later, though the United States and China have reached a temporary ceasefire in their trade war, Taiwanese electronics manufacturers continue with plans to shift production out of China to avoid punitive American import duties, worried about lingering uncertainty over U.S.-China relations. (Read: Terry Gou’s U.S. Gambit: The Eagle Has Taken Off)
As a result, the electronics connection envisioned by Gou more than a decade ago has blossomed.
Hon Hai now has three factories in the northern Vietnam provinces of Bac Ninh and Bac Giang, and leading notebook assembler Compal Electronics is planning to re-launch its facility in Vinh Phuc province, northwest of Hanoi.
Many other businesses and investors have flocked to northern Vietnam over the past three to four months, scouting the area.
One of those that moved in was communications equipment company Wistron NeWeb Corp., which quietly rented a factory from Taiwanese company Mitac Precision Technology Corporation in the Kinh Bac City industrial park in Bac Ninh.
“When you make products for American brands, if you deliver one to two months late, it will affect distribution in the market. Those who were in a rush decided to rent factory space to meet production needs, because buying land, building a plant and ramping up production takes at least a year. They would not have made it in time,” says the general manager of a Taiwanese company that has set up a factory there.
We followed the same route Terry Gou did in 2007, starting from Nanning to experience this new electronics industry artery firsthand and get an understanding of the speed, scale and sustainability of this latest Taiwanese migration tide.
Scene 1: Nanning to Friendship Pass in Pingxiang
Core Hub of the China-Vietnam Electronics Artery
Our vehicle left from Nanning and got on the flat and wide Nanyou Expressway, the major roadway heading toward the major border crossing near Pingxiang.
During the trip, we saw one 45-foot container truck after another scream by a “One Belt One Road” banner.