—Problems suffocating chip making in China could see companies move on to India and Vietnam.
—China is suffering from rising cost of labour, pandemic lockdown measures, and US sanctions.
—India and Vietnam are regarded as the closest options based on proximity and cost of labour.
Experts believe that China will remain the world’s biggest chip producer but some expect India and Vietnam to be next in line.
China’s place at the top has come under scrutiny due to supply chain breakdown during the pandemic and US sanctions. Several companies used to be wholly dependent on the country but it has not been without problems.
The Joe Biden administration is applying more restrictions on companies in the US and using chips from China. For example, these companies need special licenses to export semiconductors or related manufacturing equipment to China.
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Besides that, Chinese workers have begun demanding increased pay, and the cheap labour has been one of the reasons why chipmakers were attracted to the country.
With these problems rearing its head, companies are beginning to turn their attention elsewhere. And it makes sense that they would move their production lines somewhere around China, especially South Asia.
Vietnam is one of the locations that analysts believe chipmakers will be moving to. Samsung has allegedly pledged $3.3 billion to the country in 2022 and aims to push out more chips from there by July 2023.
India is also a favourite for computer companies and its labour costs are still low. Although, experts say that its manufacturing capabilities are still lower than China’s.
For now, China is still a leader in the chip industry as already stated at the beginning of this article.
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