Quanta eyes new Vietnam plant

Viet · Apr 23, 2023

Quanta Computer Inc’s (廣達電腦) board of directors has approved a plan to invest US$50 million in a new Vietnamese subsidiary, the company said yesterday, as the computer and server maker continues to diversify its production bases to meet customer demand for improved supply chain resiliency.

Quanta, a major assembler of Apple Inc’s MacBook computers, plans to produce notebook computers and some consumer electronics at the new Vietnamese facility, its second manufacturing hub in Southeast Asia after Thailand, it said.

“The company has been evaluating production diversification outside China since 2018 due to US-China trade disputes,” a Quanta official said in a telephone interview yesterday. “Customers are growing keen on our production allocation due to the effects of COVID-19 and geopolitical tensions.”

Quanta Computer Inc’s logo outside the company’s headquarters in New Taipei City’s Linkou District is pictured on March 30, 2020.

Photo: Vanessa Cho, Taipei Times

Vietnam has an abundant, affordable labor supply and benefits from an industrial cluster effect, the official said.
“However, China remains the company’s biggest notebook computer manufacturing site. Quanta assembles notebook computers primarily at its Shanghai and Chongqing factories currently,” they said.

Quanta’s move follows other Taiwanese electronics makers, including Compal Electronics Inc (仁寶), Wistron Corp (緯創), Pegatron Corp (和碩) and Inventec Corp (英業達), in increasing investment in Vietnam in the past few years.

Quanta has allocated manufacturing of low-cost consumer electronics and some servers to its Thailand factory, to avoid paying import tariffs implemented by the US and Europe due to a US-China trade row.

Taiwan has become the company’s major production site for servers, it said.
Quanta last week reported that first-quarter revenue contracted 18.39 percent quarter-on-quarter, down 11.8 percent year-on-year, to NT$266.18 billion (US$8.73 billion).

The company expects notebook computer shipments to return to growth this quarter, after slumping 36 percent annually to 10.8 million units last quarter.

Quanta’s net profit last year fell 14 percent to NT$28.96 billion, from NT$33.65 billion in 2021, with earnings per share dropping from NT$8.73 to NT$7.51.

Gross margin fell to 5.54 percent from 6.38 percent a year earlier.

The company plans to distribute a cash dividend of NT$6 per share to shareholders this year, representing a payout ratio of about 80 percent.