Japanese electronics maker Sharp is the latest company that is considering production relocation away from China, as the ongoing trade war between China and the United States shows no signs of cooling off.
Sharp chairman Tai Jeng-wu told reporters that the company is considering moving production of U.S.-bound laptops and other products away from China, according to a May 28 report by Japanese Nikkei.
Tai explained that about 10 percent of all Sharp laptops go to the U.S market, meaning that a possible production shift would see the relocation of a monthly production capacity of 10,000 laptop units.
While the chairman did not specify where the China-based laptop production would be moved to, he said that the company currently has multiple production bases in Southeast Asia, including Vietnam, and in Taiwan.
Meanwhile, China-based production of Sharp’s large display screens for advertisements and office use could be moved to Mexico, according to Nikkei.
Laptops, cellphones, and printers are among the list of 3,805 Chinese-manufactured products—valued at about $300 billion—drafted by the U.S. administration for imposing the next round of tariffs. Tech manufacturers are shifting production to avoid incoming tariffs.
U.S. Trade Representative (USTR) Robert Lighthizer has set a public hearing for June 17 and a public-comment period that ends on June 24—meaning the new round of tariffs would be imposed after that date.
On May 10, a tariff hike on $200 billion worth of Chinese-manufactured goods, to 25 percent from 10 percent, officially went into effect. The U.S. decision was made after U.S. officials revealed that China had reneged on commitments made during previous rounds of negotiations.
Sharp is now part of the Taiwan-based Foxconn Technology Group, after the latter acquired a two-thirds stake in the Japanese company for about $3.5 billion in 2016, according to Reuters.
Tai added that the possible relocation away from China would not affect Sharp much, given that Chinese-made products shipped to the U.S. market account for a mere 3.8 percent of the company’s total sales.
Sharp had made other relocation plans prior to Tai’s latest announcements.
On May 24, Nikkei reported that Sharp was considering moving its production of U.S.-bound multifunction printers from coastal China’s Jiangsu Province to Thailand later this year, if the next round of tariffs kick in.
The possible relocation of printer production to Thailand would affect nearly 100,000 printers, or about 20 percent of Sharp’s annual global sales, according to Nikkei.
Two other Japanese office equipment makers have also announced similar plans to shift production from China.
Kyocera, which is based in Kyoto, is contemplating moving its copiers destined for the U.S. market from the southern Chinese city of Guangzhou to Vietnam, according to Nikkei.
Kyocera’s global revenue in 2018 from sales of office equipment totaled 375 billion yen (about $34 billion). 25 percent of this came from the U.S. market, according to Nikkei.
On May 16, Nikkei reported that Ricoh was planning to shift production of its printers that are shipped to the U.S. market from China to existing facilities in Thailand.
