Exclusive Interview: The Secret Behind Moving Production Capacity Back from China to the U.S. – IET Chairman Kao Yung-Chung on Reaffirming the Strategic Value of U.S. Bases

During the peak of globalization, relocating factories to regions with lower costs and closer access to raw materials was seen as the optimal path to corporate efficiency. Kao Yung-Chung recalls that in the past, having a factory in China was often viewed by customers as a sign of cost advantage. However, following the U.S.-China tech rivalry, export controls, and pandemic-related supply chain shocks, the same factory setup can now be perceived as a supply chain risk.

This shift marks the starting point for Kao Yung-Chung, Chairman of IET Technology (IET-KY, 4971), in understanding AI-driven supply chains. AI has dramatically increased material demand and revealed that the lowest cost is no longer the sole criterion. What truly determines whether a company remains in high-end supply chains includes whether material sources are diversified, whether production capacity is located in trusted regions, and whether partners can collaboratively solve problems before crises occur.

Kao emphasizes that the rise of AI is not just about technological advancement but a fundamental transformation of global industrial structures. For instance, manufacturing AI chips requires extremely high-purity chemical materials and rare metals, many of which are produced or refined in geopolitically unstable regions. As a result, companies must now evaluate not only cost but also supply stability, technology accessibility, and ease of regulatory compliance.

Against this backdrop, many companies are actively considering 'reshoring' (bringing production back home) or 'friend-shoring' (relocating to allied nations). The passage of the U.S. CHIPS Act, aimed at boosting domestic semiconductor manufacturing, further accelerates this trend. Kao states, 'Returning to the U.S. is not merely about patriotism or political pressure—it is a practical decision to manage strategic risks and secure long-term competitiveness.'

IET Technology itself is proactively adapting to this global supply chain restructuring. The company is building integrated value chains by collaborating with reliable partners not only in Asia but also in North America and Europe. Particularly in high-purity materials for AI applications, IET is engaging in joint development with U.S. research institutions and manufacturers to ensure early technology deployment and stable supply.

Kao concludes, 'The past “optimal solution” no longer applies. In the AI era, supply chains should aim not for “optimal” but for “resilient.” Building networks that combine cost, speed, reliability, and flexibility—networks capable of withstanding disruptions—is the new survival strategy for enterprises.'