Wistron, which employs 120,000 people and operates 12 factories globally, like many sees India as a potential alternative to China. However, the business approach that worked in mainland China for Wistron may not succeed in India.
Violent protests and labor disputes in China at the world’s biggest iPhone plant made global headlines last month. Worries about lower-than-expected deliveries at the facility run by Taiwan-based Hon Hai Precision triggered a drop in Nasdaq-traded Apple’s shares. Electronics manufacturers are diversifying from the mainland, but it isn’t going to be fast or easy, warns the chairman of another Taiwan-based iPhone supplier with a global manufacturing network.
Lin, 70, has been through downturns before. The graduate of National Chiao Tung University in Taiwan got his start in the PC business at Acer in 1979 under the enduring Taiwan-born brand’s founder Stan Shih. Business was initially driven by efficiency in Taiwan, whose manufacturers were later also well positioned to take advantage of low costs, engineering talent, and investment incentives in mainland China.
“It’s not easy for the upstream suppliers to do this,” he continued. State-of-the- art printed circuit board and semiconductor factories require heavy capital expenditures, for instance, so they can't pick up and move quickly, he noted; they may also face different environmental and green energy rules if they set up in a new country.Wistron, as a result, “is going to face a long supply chain/short supply chain mix – a hybrid model in the next coming years,” Lin said.
“We already have what I would say is the ‘first-phase preparation’ of a global footprint in different stages of readiness. For instance, in Mexico, we have a full operation. But we are just building our new factory in Vietnam and also just built another in Malaysia. That means that for these two regions, we probably aren’t at an infant kind of stage, but maybe are in primary school. It’s still an early stage.
As for India, seen by many as a rising alternative to China, Lin sees two strengths. “Certainly India still has a large amount of human resources to ground manufacturing operations” he said. “It also has a big domestic market that is more open in some respects to international firms than China’s, Lin said.
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