China's Apple supplier Pegatron Planned to Move is Factory to Indonesia - Photo by Pegatron

JAKARTA (TheInsiderStories) — The ongoing trade war between the United States (US) and China has impacted Taiwanese Pegatron Corp., who have decided to move one of it’s unit factories to Indonesia.

Ist subsidiary, Chinese’ iPhone and smart-phones assembler plans to open a factory in Batam, Riau Province, starting next year, as quoted by Nikkei. The company will only move its non-iPhone products assembling division to the Indonesian factory.

Pegatron’ investment in the factory is expected to start this month, with it looking to start operations in mid 2019. Pegatron plans to rent a factory and employ around 10,000 workers.

Pegatron highlighted the decision was taken under pressured from trade tensions, labour wage increases, and labour shortages. Even though US and China is now under a trade ceasefire agreement, the company will not change its decision to move the assembling plant.

Pegatron had previously considered other countries, including Vietnam for the plant’s location, due to the existing electronic supply chain development by the Samsung Electronic smartphone assembler there. However, investment in Batam, Indonesia, can be quicker than Vietnam.

Commenting on the planned, Coordinating Minister for Maritime Luhut Binsar Pandjaitan stated, Pegatron’s investment plan is still being discussed.According to him, Pegatron has some concerns over licenses.

“I have answered. We will take care of all the licenses. So it will not be intricate, or bribed and arrested by anti-graft agency later. Pegatron can invest here as long as following the existing regulation,” Pandjaitan told reporters today (12/07) by adding that the investment will be done in stages.

Pegatron is the second-largest electronics manufacturer in Taiwan. Its total assets exceed US$14 billion. The companies businesses are in motherboards, desktop PCs, notebooks, wireless systems, game consoles, TVs, and others. While most sales revenue comes from smart-phones and other communications devices.

In December 2017, Pegatron held $39.34 billion revenue with $ 482.63 million net income. Meanwhile, its unit China’s Pegatron Corp. has around $1 billion revenue each year.

Besides Pegatron, other Chinese companies such as Wistron, Quanta Computer, and Compal that assemble Apple products, also plan to leave China, following the trade tensions.

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