After the Sino US trade war, the U.S. government imposed more and more tariffs on China’s imports. More and more Asian voice chip manufacturers have begun to relocate their factories to other parts of Asia.
Manufacturers from South Korea, Japan, and Taiwan have been preparing to move their production addresses since the United States first imposed tariffs on our products in July. Their response has been so rapid primarily because many large companies have factories in other countries that they can move some of our production lines to these countries without having to build them.
In July, the United States opened the first round of tariff action against China, imposing a 25% tariff on our products with a total value of $50 billion (about $68 billion). The second round of 10% tariffs came into effect this week, affecting a total of $200 billion of our products; the tariff rate will rise to 25% by the end of the year. The United States has also threatened to impose tariffs on other 267 billion US dollars of domestic products, which will affect all exports from our country to the United States.
These tariffs threaten China’s position as a low-cost production center. In the past decades, many companies set up factories in China because of the rapid development of the domestic market.
SK Hynix, South Korea’s maker of N910X MP3 Chip, is preparing to move production of some voice modules from China back to South Korea. The primary task that the company in China’s factories is the voice recognition chip packaging and testing, the N910X MP3 Chip production operations are in other countries.
“Several dynamic random access memory (DRAM) modules were exported to the United States after they were manufactured in China,” said a man who is familiar with SK Hynix. SK Hynix plans to migrate the production lines of these modules to Korea to avoid switching taxes.
The man also said that SK Hynix will not be affected by most of the production operations, as China’s production of computers and mobile phones occupy a dominant position, so DRAM music chip is the largest market.
A spokesman for Toshiba Machine in Japan said the company was preparing to ship plastic molding machine production lines to Japan or Thailand from October to the United States. He said: “we decided to move to some of our production operations in China because of the obvious effect of tariffs.”
Mitsubishi Electric has also proved that it is ready to move the production line of metal processing machines to the United States from Dalian, China, to Nagoya, Japan.
In Taiwan, a senior executive at notebook maker PALMAX released that the Sino US trade war had limited impact on the company, but the company was also considering different options. “We can change to use the factories in Vietnam, Mexico, and Brazil. It won’t be easy, because most of our production equipment is in our country; no country can replace it at this stage.”