Manufacturing in China and Exporting Globally ‘No Longer Viable’: Kyocera
8220;Not only have wages gone up, but obviously, with all that’s happening between the United States and China, it’s difficult to export from China to some regions.”Kyocera is building its first factory in Japan in almost 20 years. On Oct. 7, 2022, the U.S. Department of Commerce announced new export restrictions on chip manufacturing and advanced semiconductors in a bid to prevent American technology from being used in the development of the Chinese military. Tanimoto admitted that the U.S. export controls were a reason why the firm cut down its operating profit forecast for the year by 31 percent. Kyocera commands a 70 percent market share globally in ceramic components used in chip-manufacturing equipment.“If chip equipment makers stop shipments to China, our orders will be somewhat affected … They are now even [being] asked not to ship their non-cutting-edge tools,” Tanimoto said. Back in 2019, when the Trump administration had imposed tariffs on China, Kyocera had moved the manufacturing of copiers for the U.S. market from China to Vietnam.
Moving Production Out of China
Many companies have moved production out of China or plan to do so. In addition, Apple is sending the production of iPads and AirPods to Vietnam. Samsung shifted production to Vietnam back in 2019. The company has also decided to manufacture its flagship Galaxy S23 smartphones in India for local sale. Since 2018, the company has shifted 55 percent of total production out of the nation.“The big message is reducing reliance on China,” Dr. Martens’ chief executive Kenny Wilson said in November, according to the Financial Times. &#
An analysis by Investment Monitor, a network of B2B websites, shows that greenfield foreign direct investments (FDIs) in China have been falling over the past few years. Greenfield investment is a type of FDI whereby a parent company sets up a subsidiary in a different nation and builds its business from the ground up, including setting up production facilities, offices, distribution hubs, and so on. In 2022, greenfield FDI levels into China had halved compared to 2019, according to the analysis. Companies were said to be looking to diversify away from the Chinese mainland due to concerns regarding geopolitics and disruption to supply chains. The electronics sector saw greenfield FDI decline by 56.7 percent during this period, financial services by 62.5 percent, logistics 28.6 percent, software and IT services by 48.5 percent, and industrial machinery, equipment, and tools fell by 56.7 percent.]Some experts foresee more production by American firms being moved to friendlier nations.
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