Due to U.S. tariff policies, Kerry Photonics is expanding into Mexico and Canada, transforming the automotive supply chain.

Taiwan • Business • 04/23 15:02
Due to U.S. tariff policies, Kerry Photonics is expanding into Mexico and Canada, transforming the automotive supply chain.

Taiwanese automotive electronics giant Kerry Optoelectronics Co., Ltd., in response to the U.S. imposing a 25% tariff on imported cars and components, announced it will establish bases in Mexico and Canada over the next three to four years to strengthen partnerships with car manufacturers in Europe, the U.S., and Japan. This move is intended to circumvent high tariffs and directly supply to local car manufacturers, increasing the chances of becoming a Tier 1 supplier, marking a pivotal moment in its global expansion strategy.

Key Updates

04/24 18:01

Impact of US Inflation and Tariff Policies on the Economy: Experts Advise Increasing Savings, Nissan Predicts Record High Net Loss for 2024

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04/24 09:02

Nestlé and Unilever Revise U.S. Market Pricing Strategy to Counter Weak Consumer Confidence

Nestlé and Unilever have adjusted their pricing strategies in the U.S. market due to weakened consumer confidence and heightened price sensitivity. Nestlé has lowered its prices by 1%, while Unilever has slightly increased prices by 2.1% to tackle competition from store brands. Data from Nielsen and McKinsey indicate that consumers are turning to lower-priced alternatives, prompting brands to rethink their pricing strategies.

04/24 09:02

Boeing's losses narrowed to USD 31 million in the first quarter of 2025, leading to a 6% rise in its stock price due to better-than-expected performance.

In Boeing's first quarter 2025 financial report, despite U.S.-China trade tensions leading to China suspending the reception of new aircraft, Boeing narrowed its losses to $31 million, a decrease of over 90% compared to the same period last year, thanks to an increase in commercial aircraft deliveries and improved operational efficiency. As a result, Boeing's stock price rose by 6.06% on April 23. Boeing CEO Dave Calhoun stated that the company is advancing its recovery plan and considers 2025 a key year for transformation.

04/24 07:04

Hong Kong's economic growth forecast for 2025 has been downgraded to 1.5% due to the impact of the US-China tariff war and geopolitical tensions.

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04/23 21:29

Federal Reserve's Report: U.S. Businesses Shifting Costs to Consumers Under the New Tariff Policy

The Beige Book, released by the Federal Reserve Board on April 23, 2025, indicates that U.S. businesses are experiencing cost pressures due to a new round of tariff measures and have started passing these costs onto consumers. Manufacturers and retailers are responding by increasing prices and imposing additional fees. While the ability to pass on costs varies depending on company size and industry, the overall trend shows that tariff policies are impacting consumer price structures.

04/23 15:02

Due to U.S. tariff policies, Kerry Photonics is expanding into Mexico and Canada, transforming the automotive supply chain.

Taiwanese automotive electronics giant Kerry Optoelectronics Co., Ltd., in response to the U.S. imposing a 25% tariff on imported cars and components, announced it will establish bases in Mexico and Canada over the next three to four years to strengthen partnerships with car manufacturers in Europe, the U.S., and Japan. This move is intended to circumvent high tariffs and directly supply to local car manufacturers, increasing the chances of becoming a Tier 1 supplier, marking a pivotal moment in its global expansion strategy.

04/23 07:06

Taiwan-U.S. trade talks focus on taxes on alcohol and goods: The U.S. is calling for transparency and fair competition in the system

After President Trump of the United States announced a 32% reciprocal tariff rate on Taiwan, trade negotiations between Taiwan and the U.S. have heated up, with alcohol taxes emerging as a central issue. The U.S. questions the differing tax standards for imported and local alcoholic beverages in Taiwan, calling for transparency and fair competition. Taiwan's Ministry of Finance provided import data to support the negotiations. Local netizens are skeptical about whether tax reductions will be reflected in consumer prices and are worried about potential monopolies by middlemen.

04/23 05:59

The American automotive industry opposes the 25% tariff on auto parts, highlighting the appeal of Chinese manufacturing as consumers shift to buying from China.

In April 2025, six major organizations in the U.S. automotive industry, including the Alliance for Automotive Innovation, jointly sent a letter to the Trump administration, requesting the repeal of the 25% tariff on auto parts that went into effect on May 3, warning that this move would severely damage the supply chain. Due to rising car prices, American consumers have initiated a "reverse purchasing" trend, traveling to China to purchase goods, highlighting the price and quality competitiveness of Chinese manufacturing. This situation reflects shifts in the global supply chain and consumer market.

04/23 01:59

Trump's Tariff Policy on China Causes Market Turmoil: Meta's Ad Revenue Expected to Decrease, Tesla's Stock Price Rises, IBM's Financial Report Draws Attention

On April 23, 2025, U.S. President Donald Trump imposed a 145% tariff on Chinese goods, leading to global market fluctuations. Meta is projecting a $7 billion decrease in revenue due to reduced advertising spending by Chinese retailers. Tesla CEO Elon Musk announced a reduction in his involvement with government efficiency matters, resulting in a 4% increase in Tesla's after-hours stock price. The White House received tariff agreement proposals from 18 countries and is in talks with 34 countries. IBM released its financial report, with market attention on the impacts of its AI initiatives and tariffs. Dow futures rose by 500 points on expectations of easing trade tensions, indicating a stabilization in investor sentiment.

04/22 22:31

The US and India accelerate trade negotiations, the Asian markets react to the dollar's depreciation, the Chinese funds adjust their asset allocations.

In April 2025, U.S. Vice President Vance visited India, and after meeting with Prime Minister Modi, the two sides made significant progress in trade negotiations, aiming to finalize a preliminary agreement before the fall to prevent India from facing a 26% tariff. The U.S. dollar index has depreciated by more than 9% since the start of the year, while the Korean won and Indonesian rupiah have also weakened, raising concerns in the market about capital outflows and potential U.S. retaliation. Chinese public mutual funds have decreased their holdings in U.S. stocks while increasing their investments in A-shares and Hong Kong stocks as part of a risk management strategy in response to uncertainties in U.S. policies.

U.S. Tariff Policy Causes Global Automotive Industry Shockwaves

Starting in April 2024, the "reciprocal tariffs" policy promoted by former U.S. President Trump will officially take effect, imposing a 25% tariff on all non-U.S.-made cars and components. This move has triggered a chain reaction in the global automotive industry, with manufacturers like Ford, Volvo, Mazda, and Mitsubishi adjusting their North American market strategies, even suspending the export or production of certain models. Upstream automotive component suppliers are the first to bear the brunt, facing pressures such as rising costs, order delays, and production line disruptions.

In a rare move, six major U.S. automotive industry organizations jointly wrote to the government, warning that this policy could lead to supplier bankruptcies, layoffs, and production line shutdowns, thereby endangering the entire automotive manufacturing system. According to the Center for Automotive Research, the policy is expected to increase U.S. automotive manufacturing costs by over $108 billion by 2025.

Kerry Optoelectronics' Global Expansion and Strategic Shift

Kerry Optoelectronics Chairman Lin Chuan-kai pointed out that in response to the export pressure brought by the U.S. tariff policy, the company has established a subsidiary and warehouse center in the U.S. in 2024, preemptively shipping products to the local market to mitigate tariff impacts. This move has prevented significant short-term revenue losses, but Lin Chuan-kai admits that in the long term, negotiations with U.S. car manufacturers regarding cost-sharing mechanisms are still necessary.

To further consolidate the North American market, Kerry Optoelectronics plans to establish operational bases in Mexico and Canada within the next three to four years. Lin Chuan-kai stated that this strategy is not only to avoid high tariffs on imported automotive electronic products in the U.S. but also to directly supply local car manufacturers, enhancing opportunities to become a Tier 1 supplier.

"Our goal is to become the best support for European, American, and Japanese car manufacturers, directly entering their core supply chains," Lin Chuan-kai emphasized.

From Rear Seat Entertainment Systems to a Top Three Global Supplier

Founded 15 years ago, Kerry Optoelectronics has focused on the automotive electronics field, with products covering rear seat audio-visual entertainment systems, ambient lighting, and in-car electronic modules. Unlike most Taiwanese peers, Kerry Optoelectronics has not focused on the Chinese and Taiwanese markets but has concentrated on Europe, America, Japan, and Southeast Asia, collaborating with international brands such as Lamborghini, Bentley, Porsche, Audi, and Ford.

According to company data, Kerry Optoelectronics' rear seat entertainment system shipments account for about 30% of the global market, firmly ranking among the top three global suppliers. By 2025, the company plans to add three U.S. partner car manufacturers and initiate mass production of a large order in the European market, while also establishing a subsidiary in Japan to actively expand local revenue.

Strategic Importance of Mexico and Canada Locations

Choosing Mexico and Canada as new locations holds multiple strategic advantages for Kerry Optoelectronics. First, both countries are members of the USMCA, and products manufactured locally can enjoy tariff benefits, further reducing costs for entering the U.S. market. Secondly, both Mexico and Canada have mature automotive manufacturing clusters, facilitating closer supply chain relationships with local car manufacturers.

Additionally, Mexico's relatively low labor costs provide a cost advantage for automotive electronic products that require extensive assembly and testing; meanwhile, Canada's stable regulations and technical talent resources make it suitable as a base for R&D and high-end manufacturing.

Globalization Trend of Taiwan's Automotive Electronics Industry

Kerry Optoelectronics' global expansion is not an isolated case. According to industry data, Taiwan's automotive electronics output value is expected to exceed NT$600 billion by 2025, with automotive electronics accounting for more than 50% of the total vehicle cost. Several Taiwanese companies, such as E-Lead, MSI, and Mitac Digital, are actively expanding overseas markets, showcasing Taiwan's international competitiveness in the automotive electronics field.

As the global automotive industry moves towards electrification and intelligence, supply chain flexibility and geographic diversification have become crucial for corporate survival. Kerry Optoelectronics, through its early deployment of U.S. warehousing and planning of Mexican and Canadian bases, not only demonstrates its keen response to market changes but also provides a concrete example of internationalization for Taiwan's automotive electronics industry.

References

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