Feb 17, 2022
It won’t be as easy as picking up your stuff and leaving; but there’s a way.
There’ll be legal and financial constraints to navigate, and what it takes to move from China to Taiwan is circumstantial.
However, the following steps aim at giving you the upper hand when making the move to leave the factory in China with little to no way of stopping you.
These are the steps to Move Manufacturing Out of China
1- Make sure you own your tooling and molds.
You know how expensive tooling and molds are; the least you want is that when you tell your Chinese manufacturer that you’ll no longer work with them, they’ll say
Okay, but we own the tooling and molds, so you can’t take them with you.
The only way to avoid this situation is by agreeing with your Chinese manufacturer to make it clear that you are the sole owner of tooling and molds.
For anyone about to start manufacturing in China, make sure your China manufacturing agreement includes a provision that makes it crystal clear that you are the owner of molds and tooling.
If you’ve been working with a Chinese manufacturer for a while now and you have no legal way to prove you own the molds, then you’ll have to start by seeking legal advice.
This link might help How Not to lose your molds/tooling in China.
2- Register your brand name in Taiwan
Before your manufacturer in China has the slightest suspicion that you’re planning to move manufacturing to Taiwan, go ahead and register your brand names and logos in Taiwan.
You’d be surprised at the length some Chinese manufacturers might go as retaliation for taking your business somewhere else.
If they find out where you’re moving your production to, they might go and register your brand name and logo as theirs.
Now you won’t be able to use your brand name and logo on your products.
Don’t let this happen to you; register your brand name and logos in Taiwan.
Owning your molds and having your brand name and logos registered in Taiwan puts you in an excellent position to move from China to Taiwan.
But do expect some legal retaliation from your Chinese manufacturer.
3- Have a good law firm in your contacts
Many factories in China do not take it well when a foreign company decides to leave and will do anything to stop you or take revenge if they feel they can not keep you in business with them.
What can happen?
You might have the last of your production seized at the China border for violating trademark or design patent.
Most likely, the factory had someone in China register your trademark and now claims it.
The Chinese manufacturer might claim you owe them thousands of dollars and then report the case to Sinosure (China’s Export and Credit Insurance Corporation ). You’ll get a letter from Sinosure and find yourself in a legal issue that might prevent you from leaving China.
It’s hard to tell what kind of retaliation, if any, a Chinese manufacturer might take; that’s why you need to have an experienced legal team to help you navigate through this.
Moving Manufacturing to Taiwan
Making a smooth exit from China is the most challenging part.
Now, you only have to ensure you connect with the proper manufacturer in Taiwan.
You can check this list of the best electronics manufacturing partners in Taiwan for electronics manufacturing.
We are one of such companies.
We work on the design and manufacturing of B2B electronics; if you have an electronic device you want to manufacture in Taiwan, please contact us.
If it turns out that we’re not the best fit for your needs, we can redirect you to a more suitable company.
Why Move Manufacturing to Taiwan?
Reasons Why Taiwan is the Best Alternative Country in Asia for Electronic Manufacturing
- The supply chain is much more important than labor cost for electronics due to the high number of (custom) components needed from many factories.
- If you’re in the electronic product architecture stage, you need to determine which components to use from which manufacturer. China’s component eco-system is still unmatched in both speed and cost, and you need to be close to it, working with people who know how to navigate such an eco-system.
Taiwan-based companies tend to make the most reliable business partners.
There’s a reason why Apple, HP, Siemens, and Toshiba ask Taiwanese ODM Manufacturers to be their middleman instead of going China factory-direct.
For the past 20 years, Taiwanese firms have been working with, if not creating, the Chinese electronics eco-system. However, the main drawback of Taiwan is its higher cost.
And what about Vietnam or India? After all, some news outlets have shown an exodus of factories going to these places.
Here’s what you need to keep in mind.
- Large smartphone factories moving to India or Vietnam have made headlines. Indeed the size of these factories has quite an impact on export. But they distort the overall picture.
- Smaller electronic firms do not have the luxury to demand their top 10 suppliers set up in India. For them, the cost and time involved to move a manufacturing program are not worth it, especially when they find out that the price of local component suppliers in, say, Vietnam can be up to 40% higher.
In different forums, we’ve seen questions like
- Where to manufacture my electronics?
- What is the best place to build my electronic products in Asia?
- Where to produce electronics other than China?
- Where to make high-quality electronics outside of China?
- Where to manufacture my electronics in Southeast Asia?
- What is the best place to build my electronic products in Southeast Asia?
- Where to produce my electronics in South East Asia?
They’re many variations of what is the same question.
The focus on South East Asia and “other than China” arises due to rising manufacturing costs in China and the current geopolitical war between the two biggest economies of the world.
However, as we mentioned already, things like labor costs are not crucial for electronics manufacturing; the components supply chain is key.