Rising costs in China are prompting high-tech companies in Asia to explore alternative sourcing locations within the region as well as in North America, according to a new UPS-sponsored survey. As part of this shift, half of all high-tech trade lanes in five years’ time are expected to involve intra-Asia movements.
The survey, conducted by IDC Manufacturing Insights, revealed that 19 percent of high-tech company respondents plan to source supplies and raw materials from North America in the next three to five years; shifts in sourcing strategies will occur within the Asia Pacific region as well. Although China and Japan will continue to supply to most high-tech companies, survey findings show a significant shift of supply sourcing to both emerging and mature Asia Pacific countries in the next three to five years.
Forty-two percent of respondents reported they currently source supplies and raw materials from mature APAC countries, including Thailand, Malaysia, Hong Kong and Singapore. When looking ahead to the next three to five years, this figure jumps to 55 percent. Similarly, 16 percent of companies now source from emerging countries such as the Philippines and Vietnam, while 24 percent plan to source supplies from these countries in the future.
Findings come from an annual survey sponsored by UPS, “Change in the (Supply) Chain,” which is designed to uncover top business and supply chain trends driving change in the high-tech/electronics industry. The 2011 survey queried senior-level decision makers at high-tech companies in the Asia Pacific region.
“Shifts in sourcing strategies will impact high-tech supply chains throughout the Asia Pacific region as well as those in North America, creating long-term implications for the industry on a global level,” says Carla Huang, UPS director of marketing, high-tech/electronics segment. “In an industry where having a flexible and efficient supply chain is essential for meeting rapidly changing customer demands, high-tech companies will need to plan ahead to ensure they have logistics strategies in place that will give them a competitive advantage in a fast-evolving global market.”