Taiwanese Companies Compal, Inventec Ponder US Expansion to Avoid Import Tariffs

Taiwan-based laptop manufacturers are considering expanding to the US as a way of avoiding threats for additional tariffs made by incoming President, Donald Trump. According to Reuters, Compal, and Inventec US expansion could see the two companies establish facilities in Texas. The two companies are leading players in the global electronics markets, They manufacture components and devices for top tech brands in the world.

Trump Tariffs

Donald Trump has rattled manufacturers across the globe after he vowed to introduce a 10% tariff on US imports. Trade experts have warned that these tariffs could affect the flow of trade, attract retaliatory action against US exports, and raise costs for traders.

The President-elect’s threat to introduce a 25% tariff on Mexico has strained US-Mexico trade relations and worried a number of companies in Taiwan. In his first term, Trump introduced a range of tariffs on US imports. These included a 10% duty on aluminum and a 25% duty on steel imports. On the campaign trail, Trump proposed a 60% tariff on products that enter the American market from China.

While the probability of applying a 10% tariff hike across the board remains relatively low, there is a change that the Trump administration will follow through with its plan to pursue China with high tariffs.

Exploring Alternatives

Most Taiwanese manufacturers have invested heavily in manufacturing factories in their country to develop components for a wide range of products including electric vehicles and AI servers for the North American market. Inventec and Compal are paying close attention to see how the Trump administration will implement import tariffs.

“If tariffs are indeed imposed today, it is unlikely they will be imposed everywhere at once. We need to see what decisions Trump makes after taking office to react accordingly,” Inventec President Jack Tsai said.

Inventec President said that the AI server maker was evaluating different US locations for investment. The company was in favor of Texas due to its close proximity to power infrastructure and Mexico. Inventec makes AI servers that use chips manufactured by giant chip manufacturer, Nvidia.

Compal also has a similar plan as Inventec. Compal Electronics’ US expansion will most likely be in the southern states. The company was already talking to several states in the US to explore possible investment while maintaining a close eye to see how tariffs against Mexico unfold.

“Texas is a leading candidate just because of the power that they’ve done. Samsung is putting a giant fab in, and that’s created a lot of extra power and infrastructure there. Texas is the only state in the U.S. that has its own grid. And so, we continue to evaluate that. But no decisions have been made yet,” Compal President and CEO Anthony Peter Bonadero said.

Bigger Impact

But the impact of US tariffs on Taiwanese manufacturers could be bigger. Over the last four decades, Taiwanese companies have invested billions of dollars in China, the country that the US plans to impose a 60% tariff on imports.

In November 2024, Taiwanese economy minister said the government supports companies to shift manufacturing facilities from China. China Wistron currently manufactures AI servers and computers. The company has been expanding outside the Chinese border to countries like Vietnam, Mexico, and the US. China Wistron says its operations in the US are well prepared to handle any production changes.