Apple Supplier Wistron expects 50% of their revenue to come from Plants outside of China due to COVID-19 by 2021
A new supply chain report this morning states that the coronavirus pandemic is threatening the lives and livelihoods of many, but despite the uncertainty lying ahead of the IT industry, Taiwan-based ODM Wistron remains optimistic that its sales will grow in 2020. The outbreak in China has convinced many makers of the need to relocate some production lines to other countries. Apple supplier Wistron is looking to grow revenues generated from its factories outside of China, and expects to lower revenues from its China-based sites to about 50% of company revenues in 2021, according to company chairman Simon Lin. He further expects Wistron to have 20-25% of its revenues coming from non-China plants in 2020.
Despite the coronavirus outbreak, Wistron has continued expanding its capacity worldwide, with plans to invest US$46.8 million in its plant in Texas.
They're also to spend US$68.05 million to acquire equipment for its plant in Kunshan, China, and a maximum of US$76 million to purchase equipment for a plant in India. Wistron makes iPhones for Apple in India.
The company also announced at the end of 2019 to invest in a plant in Vietnam that will enter mass production in 2021. Lin pointed out that Wistron's combined capex for 2020 and 2021 will reach as much as US$1 billion and the company expects the investments will become the key growth driver for the next 10 years.
Lin pointed out that switching to a business model of having production spread across different regions is a necessary strategy. Wistron's plant in Malaysia will be fully used to make IoT products, while the facility in India will be responsible mainly for producing IoT, smart handheld and medical care devices. Its factories in Mexico and Europe will be handling servers and storage.
According to Digitimes, Wistron's plant in Vietnam will focus on making notebooks and desktops initially and may take orders for monitor products at a later time. Wistron is also planning more investments for its India plants for the second half of 2020 to 2021, Lin added.