Reuters: In response to political risks, SpaceX requests Taiwanese manufacturers to relocate production lines overseas.

According to Reuters Vietnam, Elon Musk's SpaceX has requested Taiwanese manufacturers to move their production lines overseas. Multiple sources revealed that due to geopolitical and economic risks, Musk has asked more than one Taiwanese manufacturer to relocate their factories to regions such as Vietnam and Thailand. Satellite component manufacturer Chin-Poon Industrial told Reuters that SpaceX asked them to move their production from Taiwan to Thailand in order to receive new orders. As the sources chose to remain anonymous, SpaceX declined to comment on the matter.

Taiwanese Businesses Expand Vietnamese Factories and Southeast Asian Manufacturing Chains to Obtain Startlink Orders

Taiwanese SpaceX supplier Wistron NeWeb Corporation, a subsidiary of Wistron Corporation, began producing routers and other network equipment for Starlink at its factory in Ha Nam province in northern Vietnam this year, an employee said. The expansion of WNC in Vietnam is largely attributed to orders from SpaceX. Reuters reporters also observed several banners outside the local factory promoting recruitment messages.

It is alleged that SpaceX requested Taiwan to vacate its manufacturing lines, according to an employee of a Vietnamese foreign company. The supplier's printed circuit board components, which are assembled through Winstron, are installed in Starlink's ground equipment. SpaceX directly informed them to produce overseas outside of Taiwan.

Shenmao Technology is a printed circuit board solder material supplier that provides parts to SpaceX. The company announced in April that it planned to invest $5 million to establish a subsidiary in Vietnam but declined to disclose the client's name and did not respond to requests for comments.

According to official documents from Taiwan and the company, GlobalWafers, a satellite parts supplier and manufacturer for SpaceX, invested in a factory in Vietnam this year. GlobalWafers declined to comment citing commercial confidentiality agreements. However, they mentioned expanding their business in Southeast Asia, including new factories in Thailand and Vietnam.

According to Taiwan's Ministry of Economic Affairs industry data, Taiwan has a huge satellite industry chain with approximately 50 companies producing ground equipment and sensitive components. The government estimated that the industry's output value exceeded $6.23 billion last year. A source familiar with Taiwan's satellite industry mentioned that SpaceX has around 12 direct suppliers, which also rely on dozens of other suppliers.

The Vietnamese government stated that SpaceX is preparing to invest $1.5 billion in Vietnam, but without a specific timetable. Despite various rumors and speculations, there is no official public statement regarding the relocation rumors of Starlink pressuring Taiwanese companies. However, including Cathay United Bank and several other Taiwanese banks rushing to establish a presence in Vietnam may provide some practical evidence for the rumors.

According to FSC data, Taiwanese banks have a total of 337 branches in Southeast Asia, with the majority in Thailand at 107 branches. Additionally, 14 Taiwanese banks are eager to enter Vietnam, currently with a total of 62 branches. The new geopolitical and economic landscape will force Taiwan's high-tech contract manufacturing lines to move outwards. With the southward migration of the supply chain, both upstream and downstream supply chains and labor markets are about to face major reshuffles and severe survival challenges.