Peng Shuanglang on US Manufacturing and Trade Imbalances
18 April 2025 · Uncategorized ·
Source: · https://finance.technews.tw/2025/04/16/the-more-factories-we-set-up-in-the-us-the-more-we-lose/
AU Optronics Chairman Peng Shuanglang stated today that panel manufacturers are unlikely to establish factories in the United States due to anticipated losses, suggesting instead a focus on purchasing nuclear power equipment from America to address trade deficits.
Speaking at Touch Taiwan's Smart Display Exhibition, Peng noted that while significant weapons purchases by Taiwan from the US do not contribute to reducing the trade deficit, Taiwan’s growing electricity demands as an AI hub could be met through nuclear power generation. He also highlighted the potential impact of Unit 3 at Kuosheng Nuclear Power Plant closing on May 17th, which would render Taiwan a “non-nuclear homeland.”
Peng explained that panel manufacturing is capital intensive and requires sufficient profit margins to justify investment; furthermore, the US currently lacks necessary infrastructure for this industry. He asserted that even with tariffs of 20% or 30%, establishing operations in the US would likely result in financial losses.
Following its merger with German auto parts giant BHTC, AU Optronics now boasts a comprehensive production layout across Europe, America, and Asia, including subsidiaries in Germany, Finland, Bulgaria, China, India, Japan, Mexico, and the United States. This global presence makes expanding operations elsewhere more strategically viable.
Peng emphasized that cost considerations are paramount for any manufacturing decision; otherwise, it would be considered irrational. He also observed that former President Trump’s efforts to reverse globalization could lead to higher product prices due to reduced competition within supply chains.
Acknowledging rising costs of essential goods from China, Peng suggested US consumers may experience a decrease in spending power and potential market contraction while China focuses on stimulating domestic demand.
In conclusion, Peng stated that former President Trump’s policies are accelerating geopolitical shifts, potentially creating two distinct global spheres: one dominated by the USA and another defined as an opposing force.
Speaking at Touch Taiwan's Smart Display Exhibition, Peng noted that while significant weapons purchases by Taiwan from the US do not contribute to reducing the trade deficit, Taiwan’s growing electricity demands as an AI hub could be met through nuclear power generation. He also highlighted the potential impact of Unit 3 at Kuosheng Nuclear Power Plant closing on May 17th, which would render Taiwan a “non-nuclear homeland.”
Peng explained that panel manufacturing is capital intensive and requires sufficient profit margins to justify investment; furthermore, the US currently lacks necessary infrastructure for this industry. He asserted that even with tariffs of 20% or 30%, establishing operations in the US would likely result in financial losses.
Following its merger with German auto parts giant BHTC, AU Optronics now boasts a comprehensive production layout across Europe, America, and Asia, including subsidiaries in Germany, Finland, Bulgaria, China, India, Japan, Mexico, and the United States. This global presence makes expanding operations elsewhere more strategically viable.
Peng emphasized that cost considerations are paramount for any manufacturing decision; otherwise, it would be considered irrational. He also observed that former President Trump’s efforts to reverse globalization could lead to higher product prices due to reduced competition within supply chains.
Acknowledging rising costs of essential goods from China, Peng suggested US consumers may experience a decrease in spending power and potential market contraction while China focuses on stimulating domestic demand.
In conclusion, Peng stated that former President Trump’s policies are accelerating geopolitical shifts, potentially creating two distinct global spheres: one dominated by the USA and another defined as an opposing force.