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Thursday 22 August 2019

Irish tech firm Taoglas shifts production to Taiwan over Trump tariffs on China

Dermot O’Shea, co-CEO of Taoglas, in the firm’s Enniscorthy offices. Photo: Ger Carty
Dermot O’Shea, co-CEO of Taoglas, in the firm’s Enniscorthy offices. Photo: Ger Carty

Shawn Pogatchnik

The Trump administration's rising tariffs on Chinese goods have spurred Wexford antenna tech company Taoglas to shift production to China's capitalist rival, Taiwan.

Co-CEO of Taoglas Dermot O'Shea told the Irish Independent that his Enniscorthy headquartered company already does 60pc of its business in the United States, so the rising cost of Chinese-made technology in the US has made it uneconomical to continue production for export there.

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"We made 20pc of our antennas last year in Shenzhen in China, but we're moving that production to Taiwan. The Trump tariffs have been adding 25pc to the cost that our customers must pay on entry to the US," he said.

"Many companies are only now starting to move production out of China to Taiwan, but we're way ahead of the curve there," he added, noting that Taiwan had been Taoglas' top site for antenna production even before Donald Trump started imposing penalties on China.

Taoglas says last year it manufactured 20 million antennas - 40pc more than in 2017 - encompassing more than a thousand designs based partly on work at the DCU Alpha R&D hub in Dublin.

Mr O'Shea said Taiwan accounts for around 90pc of antenna production currently, and that should rise close to 100pc within a few months.

Mr O'Shea said the company will keep building its American customer base because that is where the biggest opportunities exist for selling next-generation 'internet-of-things' (IoT) technology.

He said Taoglas had encouraged its newest acquisition, Dublin-based Firmwave, to set up a branch office in San Diego, and would be beefing up its engineering and marketing staff there. "We told them: you need to get going in the US because that's where the large-volume IoT projects are deploying," he said.

While Taoglas intends to keep recruiting and growing in Ireland, he said the home front is attractive chiefly as a location for R&D, thanks to subsidies and tax breaks.

"We want to do all our R&D in Dublin, because Enterprise Ireland has committed to funding 20pc of our costs, both in equipment and staff. Then you get R&D tax credits in Ireland as well," he said.

"It's also easier to attract engineers at DCU Alpha, with its co-working network, the Talent Garden."

However, for a deeper pool of engineering talent, Taoglas increasingly looks to eastern Europe, where Firmwave already operates an office in Gdansk, Poland. "It's very hard for us to find electrical engineers in Ireland and America. They're just not doing the modules we want in universities here or there in RF (radio frequency) design and antenna design," he said. "Poland is a good option for us. It's much lower-cost and the skills we need are more plentiful there."

Mr O'Shea said Taoglas sees China as an opportunity, but only for selling into its vast market.

"We will only make goods in Shenzhen for the Chinese market, which accounts for less than 5pc of our sales, a couple of million dollars' worth," he said. "We do intend to build that over time."

Irish Independent

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