Persistent production disruptions in China would not only delay 5G deployment, but also take a toll on Taiwanese firms that depend on raw materials from across the Taiwan Strait, economists said yesterday.
Many Taiwanese firms in China are still unable to resume normal operations amid an outbreak of COVID-19, and uncertainty remains high about the timing and scale of regular operations, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) researcher Liu Meng-chun (劉孟俊) said.
The Taipei-based think tank contacted Taiwanese companies in China to better understand the epidemic’s impact.
Some firms have resumed 60 percent of production capacity, but many others only have capacity of between 20 and 40 percent, due to a severe lack of labor, Liu said.
Employees have had difficulty returning from the extended Lunar New Year holiday, because of travel restrictions and concerns over the COVID-19 outbreak, the economist said.
Firms are cautious about resuming operations, as the disease has not shown signs of stabilizing and infection risks remain high, Liu said.
China’s Hubei Province, whose capital, Wuhan, is at the center of the outbreak, on Thursday again extended the holiday by another week to Thursday after confirmed cases soared by more than 15,000 in a single day with the adoption of a new diagnosis method.
Companies must meet government requirements before applying to local Chinese administrators for approval to resume operations, Liu said.
If the disruption persists, firms without the support of their parent groups could soon suffer a cash strain, while large conglomerates would prove resilient, thanks to stronger financial flexibility, he said.
The ongoing supply-chain disruption could also negatively affect local companies that depend on raw materials from China, regardless of their production location, Liu said.
The National Development Council (NDC) said that makers of auto parts, machinery tools and petrochemical products rely heavily on raw materials or components from China, which account for 40 percent of exports and 20 percent of imports in Taiwan.
NDC research director Wu Ming-huei (吳明蕙) said that some firms could seek supply elsewhere, but others need more time to adjust.
The outbreak could also disrupt 5G deployment, Liu said, as Chinese technology brands are tapping the business, with assistance from local chipmakers, chip designers and other electronics suppliers.
Smartphone sales have reportedly taken a dive in China as the virus chills and restricts consumer activity.
CIER economist Peng Su-ling (彭素玲) said that Taiwanese firms in China would mull relocating manufacturing bases, but they are preoccupied with tackling chain disruptions for the time being.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last