Pros And Cons Of Outsourcing To Taiwan: What You Need To Know

By Lonnie Barish, MBA, Biologics Manufacturing & Development Consultant

Today, numerous businesses adopt outsourcing to Asia as a pivotal strategy for enhancing profitability, global reach, and operational efficiency. Faced with the imperative for worldwide supply and cost-effective manufacturing, enterprises turned to lower-cost economies in Asia. This region emerged as a prime destination for Western companies seeking to leverage the burgeoning labor markets. Asian governments recognized this trend as an opportunity to bolster infrastructure and workforce capabilities, thereby facilitating outsourcing endeavors. Furthermore, Asia's abundant pool of skilled, English-speaking professionals further solidified its appeal to outsourcing firms. Among Asian territories, Taiwan has emerged as a strategic manufacturing hub, capitalizing on the pursuit of streamlined global supply chains and competitive advantages, thus positioning itself as a preferred outsourcing destination.

Renowned for its advanced technology and electronics manufacturing prowess, Taiwan attracts outsourcing ventures across various sectors, including pharmaceuticals, electronics, and cutting-edge "smart" technologies. The island boasts a robust Original Equipment Manufacturer (OEM) sector, catering to some of the world's foremost corporations. In 2022, Taiwan witnessed an influx of approved Foreign Direct Investments (FDI) amounting to $13.3 billion, underlining its appeal as a manufacturing outsourcing destination, with projections indicating continued opportunities for foreign investors in 2023.

Nevertheless, the decision to outsource entails both benefits and drawbacks that necessitate careful consideration by businesses. This article dives into the advantages and disadvantages of outsourcing that warrant attention.