TAIPEI (TVBS News) — In a significant development for Taiwan's technology supply chain resilience, PEGATRON Corporation's (和碩集團) CEO Teng Kuo-yen (鄧國彥) revealed on Friday (Jun 6) that the major electronics manufacturing firm has successfully navigated around China's recent export controls on critical rare earth metals. Speaking at the company's annual stakeholders' meeting, Teng detailed how the restrictions — implemented by Beijing in April as a countermeasure to Washington's increased tariffs on Chinese imports — had sent ripples of disruption through the global electronics manufacturing ecosystem. The Taiwanese contract manufacturer, which produces components for numerous international technology brands, responded with a strategic two-pronged approach: engineering collaborative product redesigns with clients while simultaneously securing alternative rare earth material sources from non-Chinese suppliers.
The chief executive provided insights into the company's rapid adaptation process, explaining that China's specific prohibition on exporting medium and heavy rare earth elements — critical components in many electronic devices — had necessitated an intensive collaborative effort with Pegatron's international clients spanning approximately two to three months. Teng reported a successful resolution of supply chain vulnerabilities specifically within the information and communications technology sector, which constitutes Pegatron's core business area. Most of the clients have switched to different sources of rare earths through design changes, he explained during the presentation, while clarifying that ongoing challenges in the automotive industry's rare earth supply chain remain outside the scope of Pegatron's manufacturing portfolio and therefore do not impact the company's operations.
Delving into the technical aspects of the adaptation strategy, Teng noted that numerous electronic components — particularly those requiring high-performance magnets in devices like speakers, vibration motors, and sensors — had traditionally relied on medium and heavy rare earth elements for their specific magnetic properties. These specialized materials, primarily sourced from China which controls approximately 80% of global processing capacity, had become a strategic vulnerability following Beijing's export controls. The executive highlighted Pegatron's engineering agility, noting that the company had successfully completed the transition to alternative materials and redesigned components within a compressed three-month timeframe, effectively insulating its supply chain from geopolitical trade tensions between the world's two largest economies. ◼