Leading Taiwanese technology businesses are reportedly considering moving their manufacturing bases to India from China in order to decrease their dependency amid rising tensions between Taiwan and China, as per the country’s senior policymakers.
The deputy minister for Taiwan’s national development, Kao Shien-Quey, stated there is a lot of room for cooperation between New Delhi and Taipei in fields of cutting-edge and critical technology, such as the production of semiconductors and electronic equipment.
While speaking with the media, she claimed that major Taiwanese technology firms are considering India as their crucial top destination to enhance and strengthen their global supply chains.
According to Kristy Tsun-tzu Hsu, the director of the top policy think tank Taiwan ASEAN Studies Centre at the Chung-Hua Institution of Economic Research, India is an important country for Taiwan. She also stated that Taiwanese businesses operating in China are considering “decoupling” the global supply chain from China while keeping it intact for domestic consumers.
Leading Taiwanese technology businesses are reportedly considering moving their manufacturing bases from China to countries in Europe, North America or India in order to decrease their dependency amid rising tensions between Taiwan and China which have escalated recently caused by the recent military drills by China around the Island nation.
Even the trade dispute between US and China can also be considered as one of the reasons why Taiwan’s technology firms are planning to relocate their manufacturing. The relations between China and Taiwan also strained because US House Speaker Nancy Pelosi visited the island nation last August, which irked China.
India is interested in having manufacturing facilities from leading Taiwanese Semiconductor manufacturers, such as Taiwan Semiconductor Manufacturing Corporation (TSMC), the largest chipmaker in the world with Apple among its clientele.
Shien-quey stated, “With the larger context of global supply chain restructuring and the ‘China plus one’ strategy, I am sure that we will see an acceleration of collaboration between the two sides in the field of semiconductor and information and communication industry”.
As per reports, a significant number of Taiwanese firms are planning to establish their production facilities at two industrial parks in India that are being built specifically for Taiwan’s leading industries. Even final negotiations are taking place for a Taiwanese semiconductor manufacturer to establish a production plant in India.
Shien-quey stated, “We are actively promoting the diversification of the production bases of the Taiwanese companies and we would like them to move their production bases to other countries with a like-minded value system”.
The size of the Indian economy, according to Tsun-tzu Hsu, can give Taiwan some opportunities to alter its trade dynamics with China. She added, “It is not only about trade. It is more about strategic collaboration. Our companies were considering moving to India even before the beginning of the US-China trade war because the Indian economy is so large that it can provide some opportunity to Taiwan to change the dynamics with China and reduce its dependence on China”.
As per Tsun-tzu Hsu, the Taiwanese government has been working to expand its trading network by negotiating a trade agreement with India. She said. “Recently, we see new momentum in Taiwanese companies moving to India and expanding their operations. The expansion of Foxconn is one such example”.
Recently Taiwan-based Foxconn, the world’s largest technology manufacturer and Apple’s supplier has signed multiple deals to set up manufacturing units in India. Earlier, the Karnataka Government approved Foxconn to invest USD 968 million in the state in March.
Deputy Minister Shien-quey stated, “India is strong in its software capabilities while Taiwan is strong in hardware and manufacturing in the ICT sector. There is a lot of room for complimentary collaboration here. Secondly, India enjoys a very huge domestic market. So this is also an incentive for investment”.
While talking about the Foxconn deal, she said, “Since Foxconn is already there (India) and some of the suppliers in the lower part of the supply chain for Foxconn are also in India, I am sure that this will attract more companies to invest in the upstream of the value chain”.
These ongoing talks with Taiwan’s technology businesses will promote India Semiconductor Mission. It will boost India’s ambition to become a global electronics manufacturing and design hub. In the manufacturing of modern electronics, semiconductors are critical components in it. From autos and medical equipment to smartphones and laptops, they are utilised in a variety of products to make integrated circuits, memory modules, and microprocessors in these products.
