Qualcomm Boosts Taiwan Procurement, Reducing Supply Chain Risks and Providing Growth Opportunities for Taiwanese Companies

According to a report from Juheng.com, in response to geopolitical risks, Qualcomm is continuously adjusting its supply chain, and is expected to increase its procurement amount in Taiwan to more than NT$300 billion next year, setting a new record. In the past, most of Qualcomm's packaging and testing orders were placed in Singapore and mainland China. However, it will now move some of its production to Taiwan, benefiting companies such as ASE and KYEC in the packaging and testing field, as well as companies such as ASE and Yageo in the testing interface field.

Due to the tensions caused by the US-China tech war, global companies, from brand manufacturers and IDM companies to IC design companies, have started to adjust their supply chain ratios to reduce the risk of supply chain disruptions. In addition to meeting demand in mainland China, they are also actively reducing the proportion of products manufactured in China and shifting production to Taiwan and other locations to meet global demand outside of China.

Qualcomm has already transferred most of its more mature process chips, such as power management chips (PMIC), to Taiwanese factories for production. With wafer foundries shifting to Taiwanese factories for production, Taiwanese companies have also taken on Qualcomm's packaging and testing business. This not only reduces carbon emissions from shipping chips but also diversifies risks and streamlines the supply chain.

In addition, Qualcomm has traditionally placed testing interface orders with Japanese and Korean companies. However, as the supply chain between Qualcomm and Taiwan becomes increasingly close, Taiwanese companies such as ASE and Yageo are also expected to participate in the development of new products, further replacing other companies and becoming new sources of growth.

As companies adjust their supply chain ratios, they may seek out new suppliers or partners in regions such as Taiwan, presenting opportunities for distributors to expand their network and offerings. Additionally, as Qualcomm shifts more of its production to Taiwan, there may be increased demand for certain components or products, which distributors can take advantage of by keeping a close eye on market trends and adjusting their inventory accordingly.