A new wave of production regionalization is emerging with electronics manufacturers stepping up relocation from China to Southeast Asian countries, mainly Thailand, Vietnam and the Philippines, at the request of clients, as US-China tensions have yet to ease and the Covid-19 pandemic is raging across India, according to supply chain sources.

New production lines being or to be set up in Southeast Asia will be mainly used to handle new orders from clients for new-specs products, and therefore they are not just moving their existing production facilities from China, the sources said.

There are still many personnel management issues to be addressed in Southeast Asia, but sufficient supply of cheaper labor forces there will enable manufacturers to save significantly on overall operating costs, the sources said.

Many supply chain players ranging from components vendors to system assemblers had earlier readied relocation plans but been reluctant to implement them after factoring in costs and related supply chain support. But now they are revisiting their production diversification plans at the request of clients, the sources said.

But electronics firms differ in their ways of carrying out the plans. Kinpo Electronics, for instance, has completed deep manufacturing deployments in Thailand and will be able to use part of its available capacity to help its major shareholder Compal Electronics digest some manufacturing orders in the Southeast Asian country.

Delta Electronics is carrying out its production regionalization efforts through its subsidiary in Thailand, including investments in other Southeast Asian countries or even India.

Keyboard maker Chipcony Electronics and power supply vendor Chipcony Power have both been strengthening deployments in Thailand, the former having just purchased new land lots in Thailand to support further capacity expansions there.

Plastics mold and hinge maker Syncmold Enterprise has newly acquired manufacturing facilities in Thailand owned by peer Leohab Enterprise to support its production there. The company has also set up a new plant in Vietnam to serve major clients in China, with the plant to start volume production in early 2022.