Anger in Taiwan over reports SpaceX asked suppliers to move abroad

https://www.theguardian.com/world/2024/nov/07/space-x-taiwan-manufacturing-claims-elon-musk

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Taipei says it is paying close attention to reported request by Elon Musk’s firm

Taiwan’s government says it is paying close attention to reports that Elon Musk’s SpaceX asked Taiwanese suppliers to move manufacturing to other countries because of “geopolitical” concerns.

Reuters reported on Wednesday that SpaceX’s request to suppliers in Taiwan’s multibillion-dollar industry appeared to have prompted some to shift locations to Vietnam, Thailand and other places. In response, Taiwan’s economic affairs minister, JW Kuo, said the industry was strong and “should be able to cope”, but that the government was monitoring the situation.

“There is no such information on its official website, but some foreign media are reporting it, and we are paying close attention to it. I think the supply chain in Taiwan is very strong and it should be able to cope with the situation,” Kuo said.

“Short-term political factors should not affect the supply-chain relationship between international satellite companies and Taiwan manufacturers.”

There are 46 Taiwanese companies producing components and sensitive equipment for the global satellite industry, including for around a dozen companies that then directly supply SpaceX.

One satellite component maker, Chin-Poon Industrial, told Reuters it had been asked to move its manufacturing operations to Thailand “mostly due to geopolitical considerations”. Two other SpaceX suppliers, Wistron NeWeb Corporation (WNC) and Universal Microwave Technology, expanded to Vietnam this year, the report said. Neither would comment on individual clients, but both have cited geopolitical concerns as reasons for their expansions.

A spokesperson for WNC told the Guardian that all Taiwanese businesses considered “geopolitical risks” among other factors. “But still, it mainly depends on customer demand. We are in accordance with the needs of the customer to make decisions,” she said. Other suppliers declined to comment or told the Guardian they were bound by confidentiality agreements.

China’s ruling Communist party claims Taiwan as a province of China and vows to annex it, with military force if necessary. The prospect of a war over Taiwan has global ramifications, including for supply chains. Taiwan produces the vast majority of the most advanced semiconductors, and has resisted foreign entreaties to move production overseas, maintaining what analysts have dubbed a “silicon shield” deterrent against a Chinese attack.

Musk seeking to move his supply chain ahead of potential conflict renews focus on his fractious relationship with Taiwan, and concerns over how the incoming Trump administration – in which Musk is expected to play a role – will approach the delicate situation. In 2022 he told the Financial Times that he believed a conflict over Taiwan was “inevitable”.

The reported request from SpaceX sparked anger in Taiwan. On social media, some accused him of being “ungrateful” for the local SpaceX suppliers. “Taiwanese, why aren’t you angry? We should refuse to buy Teslas,” said one person on Threads. In Taiwan Tesla was the 10th best-selling new car in 2023 and 2024, with sales rising more than 50% since 2022.

It is not the first time Musk has angered Taiwan. In September last year he asserted Taiwan was an integral part of China akin to the US state of Hawaii, and that it was only “arbitrarily” separated because of US protection. In the 2022 interview he recommended Taiwan accept a level of control similar to Hong Kong – something Taiwan’s government and people overwhelmingly reject.

A recent report by the Wall Street Journal, which said Musk had been in regular contact with the Russian president, Vladimir Putin, also claimed he had kept Starlink away from Taiwan on request from Putin as a favour to China’s leader and Putin ally, Xi Jinping. Previous reporting has said Starlink is not available in Taiwan because of Taiwanese requirements for majority local ownership.

The story has also garnered significant attention in China. On Weibo it was the top trending topic on Thursday, with more than 190m engagements on one related hashtag, many praising Musk’s “foresight” regarding China’s unification goals. Some of the posts on Weibo included an old video of Musk discussing China’s claim over Taiwan.

“Although Musk’s move seems cold, it is actually a precise control of geopolitical risks,” said one.

SpaceX has been contacted for comment.

Additional reporting by Chi-hui Lin