Taiwan-based passive component makers will be freeing up non-China production capacity if necessary, as their manufacturing operations in China have experienced low labor return rates after the Lunar New Year holiday, according to the companies.
About 80 Chinese cities have been locked down due to the fast-spreading coronavirus in China, with companies operating their plants locally implementing closed-off management measures. Meanwhile, low labor return rates have become a challenge facing China-based factories following the Lunar New Year holiday.
Yageo and Walsin Technology, makers of MLCCs and resistor chips, started operating their China-based operations on February 10 after the extended Lunar New Year break. Nevertheless, both companies have seen a low return rate of workers amid the ongoing outbreak, according to industry sources.
Employee shortages are already an issue for both Yageo’s and Walsin’s China-based operations, said the sources, adding that the coronavirus epidemic is also making their post-Lunar New Year recruitment plans more difficult. Yageo has plants in Suzhou and Dongguan in China, while Walsin runs a factory site in Dongguan.
Whether production at Yageo’s and Walsin’s China-based plants can be run smoothly amid the outbreak remains to be seen. However, both firms have decided to adjust their production capacities by putting increased focus on non-China production.
Yageo disclosed that the company is ramping up capacity at its factory site in Kaohsiung, southern Taiwan for short lead-time orders. Production capacity at its Kaohsiung plant will also help make up the capacity that has not been restored at its China-based plants following the Lunar New Year break, said the Taiwan-based maker.
Walsin has stepped up precautionary measures against the epidemic at its China-based operations, and will increase its non-China production to satisfy customer demand, according to the Taiwan-based company with manufacturing sites in not only China but also Taiwan, Japan and Malaysia.
In addition, inductor maker Chilisin Electronics is striving to improve its capacity utilization rate in China, while boosting its non-China production to mitigate the coronavirus impact on its output. Chilisin also has factory sites in Taiwan and Vietnam.
Chilisin’s affiliated resistor maker Ralec is also freeing up its production in Malaysia, which now accounts for nearly 75% of Ralec’s total capacity, according to company sources.
