(JW Insights) Feb 23 -- US curbs on China’s access to advanced technology are killing its viability as a manufacturing base for exports, reported Financial Times on February 21, citing Hideo Tanimoto, president of Kyocera, as the Japanese company shifts its production elsewhere and invests heavily in facilities at home.

Hideo Tanimoto said, “It works as long as [products are] made in China and sold in China, but the business model of producing in China and exporting abroad is no longer viable. Not only have wages gone up, but obviously, with all that’s happening between the US and China, it’s difficult to export from China to some regions.”

Kyocera’s products include phones, printers, and solar panels. The company holds a 70% global market share in ceramic components for chip manufacturing equipment. Tanimoto said US export controls were part of the reason Kyocera cut its full-year operating profit forecast this month by 31%, reported Financial Times.

“If chip equipment makers stop shipments to China, our orders will be somewhat affected . . . They are now even [being] asked not to ship their non-cutting-edge tools,” Tanimoto said.

Tanimoto said it would now be nearly impossible to produce hardware in China without access to the chips technology affected by the tightened regulations, although the country may still have a competitive edge in software and artificial intelligence, reported Financial Times.

Kyocera has increasingly found itself caught up in the trade dispute between the world’s two largest economies.

In 2019, it relocated the manufacturing of its copiers for the US market from China to Vietnam to avoid tariffs on China imposed by the Trump administration. It also transferred the production of in-vehicle cameras for the US from China to Thailand.

(Li PP)