SpaceX asks Taiwanese firms to relocate

GEOPOLITICAL ISSUES?
The economy ministry said political factors should not affect supply chains linking global satellite companies and Taiwanese manufacturers.

• Reuters, TAIPEI and HANOI

Elon Musk’s Space Exploration Technologies Corp (SpaceX) has asked Taiwanese suppliers to move production outside Taiwan, resulting in the relocation of parts of their supply chain, according to sources hired by and close to equipment makers and corporate documents.

A source at the company, which is one of numerous subcontractors supplying components for SpaceX’s Starlink satellite internet products, said SpaceX has asked its manufacturers to produce products outside Taiwan due to geopolitical risks, pushing at least one of them to move production to Vietnam .

A second source who works with Taiwanese satellite component manufacturers in the country said SpaceX has directly asked suppliers to move production overseas.

Photo: Reuters

Chin-Poon Industrial Co (敬鵬工業), a satellite component maker that said it was most recently a supplier to SpaceX, told reporters that the US company had asked it to move its production from Taiwan to Thailand for new orders “mainly due to geopolitical considerations.”

It didn’t specify.

The sources declined to be identified because the information was not public.

SpaceX did not respond to requests for comment.

SpaceX’s requests bring renewed attention to Musk’s contentious relationship with Taiwan, especially after he said last year that Taiwan was an “integral part” of China, drawing sharp criticism from Taipei.

Last month, a Vietnam-based investment adviser told reporters that SpaceX officials said in a private meeting last March that the company was interested in setting up a satellite manufacturing center in Vietnam and had sought advice on protecting intellectual property.

When asked about SpaceX’s Taiwanese suppliers going overseas, the Ministry of Economic Affairs said that “short-term political factors should not affect supply chain relationships between international satellite companies and Taiwanese manufacturers.”

Taiwanese SpaceX supplier Wistron NeWeb Corp (WNC, 啟碁科技) this year began producing routers and other networking equipment for Starlink at its plant in northern Vietnam’s Ha Nam province, about an hour south of Hanoi, two plant workers and a contractor said.

Wistron NeWeb’s expansion in Vietnam has a lot to do with orders from SpaceX, one employee said.

The Hanama factory plans to at least double its workforce to 3,000, according to a contractor and one of the workers.

As journalists noticed in the middle of last month, several banners near the plant advertised job offers at the plant.

WNC declined to comment, citing client confidentiality.

The latest annual report, published in April, said: “In the face of geopolitical risks and ever-changing customer demands, WNC continues to expand its global manufacturing capabilities.”

Universal Microwave Technology Inc (UMT, 昇達科技), another supplier and manufacturer of SpaceX satellite components, invested in a plant in Vietnam this year, according to Taiwanese official and public company documents.

UMT declined to comment on individual customers, citing confidentiality agreements, but said it was expanding its presence in Southeast Asia, including new factories in Thailand and Vietnam.

“Planning overseas production facilities will help customers reduce their doubts about geographic risks, gain customer acceptance and increase customer cooperation,” it said.

Taiwan has a large satellite industry, with about 50 companies producing ground equipment and sensitive components, according to ministry and industry data.

The government estimates that output in the sector topped NT$200 billion (US$6.26 billion) last year.

SpaceX has about a dozen direct suppliers from Taiwan that rely on dozens of domestic suppliers, said a source involved in the local satellite industry.

In September, the Vietnamese government said SpaceX wants to invest US$1.5 billion in the country, although the timing and targets of the actual investment remain unclear.

Shenmao Technology Inc (昇貿科技), a circuit board soldering materials supplier that supplies components to SpaceX, said in April it would spend US$5 million to set up a unit in Vietnam, without specifying who its customers would be. for the products of this enterprise.

The company did not respond to a request for comment.