TAIPEI -- Pegatron is considering moving production from China to its other factories around the world as means to cope with tariffs and other supply-chain issues.

The world's second-largest ODM says existing sites in the Czech Republic and Mexico are possible landing spots for its existing programs, while the possibility exists that it would launch additional factories in Southeast Asia.

Chief executive officer S.J. Liao said on a conference call that the supply chain in China is being disrupted by higher wages and a lack of qualified personnel. He said balancing production across additional regions would ease pressures to increase staffing at critical periods, such as ahead of the holiday season when major Pegatron customers such as Apple and Microsoft ramp production.

With regard to the US tariffs on products made in China, the company said the worst could be yet to come. Company CFO Charles Lin said the effects of the US-China tariffs won't be truly felt until 2019.

While production could be moved in a fairly short time frame to existing sites, the process of procuring land and opening greenfield factories in Asia would take two to three years, the firm estimated. Pegatron would seek to share any costs of reallocation with customers, the firm added. 

Pegatron is the world's second-largest ODM/EMS, according to the CIRCUITS ASSEMBLY Top 50.

• Prev
• Next