The Tycoons Behind China’s Gadget Factories Boom Prepare to Pivot
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Thirty years ago, Taiwanese tech entrepreneurs started moving factories to the mainland, kicking off a global economic transformation that’s made China the world’s top manufacturer of electronics. Today, four Taiwan-based companies—Foxconn Technology Group, Inventec, Quanta Computer, and Compal—together account for some 40% of exports from China to the U.S. of computers, phones, and related items. But faced with growing trade tensions and U.S. tariffs, the leaders of those companies are reconsidering their commitment to China. Although any pivot away from the country is just starting, factories that leave won’t come back anytime soon. Here are four men responsible for the shift decades ago who will play a key role in deciding how much longer China will remain the global manufacturing king.
• Key products: Apple iPhone, Amazon Kindle, Google Pixel
• Signs of change: Expanded Indian manufacturing of older-model iPhones; building a plant in Wisconsin
Gou started out making knobs for black-and-white TVs, then connectors for game-console maker Atari, then just about every gadget imaginable. Today, Foxconn is the world’s biggest electronics contract manufacturer, with facilities in more than 30 Chinese cities and in 14 other countries. Gou relinquished his chairmanship this year for a failed bid for Taiwan’s presidency, but company insiders say he remains the ultimate decision-maker at Foxconn. While the company has faced criticism for its treatment of factory workers, Gou has raised wages and improved working conditions. A promised facility in Wisconsin praised by U.S. President Trump hasn’t yet opened, but the company says it will build server components and device screens there.
• Key products: HP laptops, Apple AirPods, Google servers
• Signs of change: Plans to move production of laptops for the U.S. market to Taiwan by December
Yeh is a key backer of Taiwanese tech companies and has invested in businesses from real estate to orchids. As the trade war intensified, an Inventec executive said Yeh had offered to convert an orchid-growing facility in Vietnam into an Inventec factory to skirt U.S. tariffs. While the comment was in jest, Inventec has shifted some production of small appliances to Malaysia and has said it will move manufacturing of U.S.-bound laptops to Taiwan. On Thursday, its board approved an NT$1.2 billion ($40 million) plan to buy factory land in Taoyuan in the island’s north.
• Key products: Apple MacBook, Apple Watch, Amazon and Google servers
• Signs of change: Expanding capacity in Taiwan and looking at locations elsewhere in Asia
Lam was born in Shanghai, but his family fled to Hong Kong during the Chinese civil war, and he studied in Taiwan. Although he was diagnosed with lung cancer more than a decade ago, he’s still the public face of Quanta. Lam describes the company as a turtle—patient and persistent—but it can strike fast when necessary. He’s bought a factory adjacent to a Quanta facility in the northern Taiwanese city of Taoyuan, where he’ll make what he calls “premium products”—likely servers and high-end laptops. He’s also scouting locations in Southeast Asia and expanding a 7-year-old data center business in the U.S. On Friday, Lam’s company announced it would be setting up a Thai subsidiary — its very first in Southeast Asia.
• Key products: HP and Dell laptops
• Signs of change: Adding notebook-manufacturing capacity in Taiwan and considering further investments in Vietnam
Chen has a mixed record in China: In 2018, Lenovo Group paid Compal $257 million to unwind a joint venture the two founded in 2011. But a year earlier, Compal lost more than $130 million when Chinese phone brand LeEco failed to pay for handsets. Today, Compal is looking back home, with a new factory in Taoyuan and expansion of a plant nearby. After Trump introduced his tariffs, Compal began making networking gear in Vietnam, and the company says it may add other products to its facilities there.
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