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The Dangers of Single Sourcing in Your Supply Chain

Resilinc

Imagine a critical part of your product is only made in one factory in Taiwan. This is very possible, considering 60% of the world’s semiconductors are made in Taiwan—and 90% of the world’s highly advanced chips are made by the Taiwanese company TSMC. If something were to happen in Taiwan—like the recent 7.4

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Foxconn Under the Political Looking Glass

Supply Chain Matters

A published report by The Wall Street Journal this week indicates that both Apple , and contract manufacturer Foxconn are: Getting Caught in Taiwan Tensions With iPhone Supplier Probes. In 2019, Gou gave up his chairmanship of Foxconn after announcing a Taiwan presidential bid.

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Added Evidence of Emerging Regionalization of Global Supply Networks

Supply Chain Matters

Locations that have benefitted from this sourcing shift are noted in the report as Vietnam and Mexico , the latter being a preferred nearshoring or friendshoring alternative. As an example, the authors point to Vietnam gaining ground in electronics, apparel and textiles, while Mexico has been increasing U.S. supply chain activity.

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Added Headwinds for Global PMI Production Indices in June and Q2 2022

Supply Chain Matters

The S&P Global Taiwan Manufacturing PMI® declined to a contractionary of 49.8 for June and noted as a signal of renewed deterioration in the health of Taiwan’s manufacturing economy. The S&P Global Vietnam Manufacturing PMI® posted a value of 54 in June, compared to a value of 51.7 reported for March.

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Global PMI Levels in July Remain of Concern

Supply Chain Matters

The two special regions of concern are the Eurozone and Taiwan. Further indicated were signs of weakness occurring in China , Japan , Malaysia, South Korea , Taiwan and Vietnam. Taiwan ’s decline is directly related to both China along with continued constrained demand levels for high tech, smartphone and consumer electronics.

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Global Production Activity Levels Unchanged In May But Provide Added Warning Signs

Supply Chain Matters

Significant Deterioration for Taiwan The May S&P Global Taiwan Manufacturing PMI® report was headlined with business conditions across the country’s manufacturing sector deteriorating at a faster pace. The May PMI value of 44.3 dipped a significant 2.8 percentage points from the 47.1 reported in April.

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November Global PMI Reporting Reflects Some Stabilization

Supply Chain Matters

Taiwan Moves Closer to Stabilization The S&P Global Taiwan Manufacturing PMI® November report was headlined with Taiwan manufacturing levels “ moving closer to stabilization in November.” This index is a compilation of seven ASEAN nations- Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand , and Vietnam.