Taiwan's industrial computer manufacturers respond to U.S. tariffs: Price hikes and plans to set up U.S. factories are advancing in tandem
The Taiwanese industrial computer industry is responding to the U.S. reciprocal tariff policy, with large companies like Advantech, Avalue Technology, and ADLINK negotiating price increases with clients, while medium and small-sized companies like Axiomtek and Vecow are setting price hikes of 5% to 10%. Avalue Technology plans to move its factory setup from Mexico to Tennessee, USA, with production expected to start in the third quarter of 2025. Advantech is considering setting up PCB assembly capabilities in the U.S. Medium and small-sized companies like Axiomtek and Vecow have completed their manufacturing setups in North America, showcasing their flexibility and adaptability.
Key Updates
04/19 22:04
Taiwan's industrial computer manufacturers respond to U.S. tariffs: Price hikes and plans to set up U.S. factories are advancing in tandem
The Taiwanese industrial computer industry is responding to the U.S. reciprocal tariff policy, with large companies like Advantech, Avalue Technology, and ADLINK negotiating price increases with clients, while medium and small-sized companies like Axiomtek and Vecow are setting price hikes of 5% to 10%. Avalue Technology plans to move its factory setup from Mexico to Tennessee, USA, with production expected to start in the third quarter of 2025. Advantech is considering setting up PCB assembly capabilities in the U.S. Medium and small-sized companies like Axiomtek and Vecow have completed their manufacturing setups in North America, showcasing their flexibility and adaptability.
Tariff Pressure Drives Price Increases
With the United States implementing reciprocal tariff measures on Taiwan and Southeast Asia, industrial PC manufacturers are facing significantly increased costs for exporting to the U.S. market. Industry estimates suggest that tariffs will raise product costs by approximately 10% to 32%. To pass on the cost pressure, major manufacturers such as Advantech (2395), Avalue (6414), and ADLINK (6166) have begun price increase negotiations with their clients. In addition to adjusting prices, Advantech is also increasing its local component procurement and assembly ratio in North America to mitigate the impact on gross margins, while adopting measures such as exchange rate hedging and raw material cost control.
Small and medium-sized manufacturers are responding more swiftly. Posiflex (6160) and Winmate (6570) have clearly set price increase ranges for the U.S. market at 5% to 10%. Posiflex noted that the U.S. market accounts for 20% of its revenue and has simultaneously initiated supply chain cost control and local resource investment. Winmate stated that although some clients are requesting early shipments to avoid high tariffs, with the current 10% tariff rate, clients generally find it acceptable.
Avalue Shifts to Tennessee for Manufacturing, Strengthens U.S. Production
In response to U.S. manufacturing policies and tariff pressures, Avalue Technology has swiftly adjusted its North American production capacity layout. The original plan to establish a factory in Mexico has been urgently shifted to Tennessee, USA, with production expected to commence in the third quarter of 2025. The new plant, spanning 35,000 square meters, is positioned as a large assembly plant and will establish strategic alliances with clients, with some equipment provided by clients to reduce initial investment pressure.
Avalue Chairman Zhu Fuquan stated that the company already has a small factory in California, and the additional investment in the Tennessee plant is to quickly respond to changes in U.S. policies and client demands. In addition to the production base, Avalue is also expanding its U.S. subsidiaries and branch organizations and strengthening talent recruitment, demonstrating its long-term commitment to the U.S. market.
Advantech Considers Establishing U.S. PCB Assembly Capabilities
Advantech is further evaluating the establishment of printed circuit board (PCB) assembly and contract manufacturing capabilities in the U.S., building on its existing locations in Southern and Northern California. This move aims to enhance manufacturing flexibility and strengthen real-time supply capacity to the U.S. market. In recent years, Advantech has expanded its U.S. office scale and established sales teams in multiple states, indicating its deep-rooted strategy in the North American market.
Small and Medium-Sized Manufacturers Preemptively Layout, Sysgration and RuggON Show Flexibility
While major manufacturers are actively adjusting, some small and medium-sized enterprises have already completed their North American manufacturing layouts, demonstrating foresight and adaptability. Sysgration (4916) currently has manufacturing bases in both the U.S. and Mexico, highlighting its "North American manufacturing purity" as the highest in the industry. Benefiting from the USMCA agreement, Mexico is currently exempt from U.S. tariff impacts. Sysgration has also initiated a new plant expansion plan in Mexico, expected to be completed and operational in the first quarter of 2025.
RuggON stated that its U.S. subsidiary is located in Atlanta, Georgia, and has a cooperative repair center. Chairman Lu Guqing noted that if further investment in U.S. manufacturing is needed in the future, the company has complete contingency plans and resources available for deployment.
Diverse Strategies to Address Market Changes
Overall, the Taiwanese industrial computer industry is adopting diverse strategies to address changes in U.S. tariffs and manufacturing policies. From price increases and supply chain adjustments to local manufacturing and capacity expansion in the U.S., each company is adopting different approaches based on its scale and market structure. Despite the short-term increase in cost pressures, the industry generally demonstrates high flexibility and agility, striving to maintain market position amid changes.
