A recent DigiTimes report said that some Taiwanese monitor makers have begun moving their production away from China. However, only 23% of Taiwan’s monitor shipments are expected to be affected by the U.S. tariff, according to DigiTimes.
Moving Production out of China
Digitimes Research expects the PC monitor industry to see limited impact of the U.S. tariffs because monitors are much easier to assemble than notebooks and other electronic devices. As such, moving production outside of China to avoid the U.S. tariffs is a much less daunting task.
Furthermore, to minimize the tariffs’ impact, most of the monitor companies increased their inventory in the first quarter and have continued to do so in the second quarter. This should boost the monitor shipments by 10% this quarter compared to the same quarter last year. The shipments were expected to increase only 2% this quarter compared to last year.
The monitor vendors are also closely watching the depreciation of the Chinese yuan and have started to accept transactions only in the US dollar. The U.S. government is also expected to hold a public hearing for the tariff on June 17, which means that the new tariffs may be officially implemented by the end of July.
Impact On Largest Monitor Vendors
TPV, the largest global PC monitor vendor, currently sells 18% of its monitors to the U.S., the highest percentage from all the Taiwan monitor companies. TPV’s main production lines are in China, but it has started to rent production lines from Orion, a monitor maker from Bangkok. The company is not expected to rent these production lines for long, and it should soon start creating its own manufacturing facilities outside of China.
Qisda, the second-largest monitor vendor has also started shifting production lines from China to Taiwan, Southeast Asia and the US. Moving to Taiwan will be a priority for Qisda, but the monitor vendor has also found 1-2 partners in the U.S., according to DigiTimes. The company’s Taiwan facility is expected to begin production within 2-3 months.
Only 30% of Foxconn Electronics (Hon Hai Precision Industry) and Wistron’s monitor shipments have been impacted by the new tariffs. The two companies have not yet made any plans to move production out of China, as the shipments to the U.S. contribute to limited revenues for the them. Even so, the companies are expected to shift the related production out of China, if the trade war continues.
The monitor companies haven’t been affected so much by the tariffs yet also because two of their main partners, HP and Dell, have been subsidizing 15-20% of the cost, giving them some time to make adjustments.