- The company faced supply chain disruptions as some suppliers hesitated to ship to Teradyne, despite authorisation
- The company has taken this step in response to US regulations issued in October 2022
Teradyne has shifted its manufacturing operations out of China because of US export control. The worth of this manufacturing operation is approximately $1 billion.
According to Reuters, the company has taken this step in response to US regulations issued in October 2022, which restricted exports to semiconductor manufacturing facilities in China, aiming to safeguard US technology from contributing to the country’s military capabilities.
Teradyne faced significant repercussions from its decision, primarily impacting its Suzhou factory, where semiconductor test equipment production was outsourced to Flextronics.
This move was prompted by the US regulations introduced in October 2022, aligning with a larger trend among American companies aiming to decrease their reliance on China due to escalating tensions and regulatory challenges in the US-China tech rivalry.
In its 2022 annual report, Teradyne had previously warned investors about potential consequences resulting from these October regulations, highlighting their potential effects on sales and operational activities in China.
Brian Amero, Teradyne’s Director of Global Compliance and Ethics, revealed details of the move during a virtual export conference.
Amero explained, “We did manufacturing in China, so we had to get an emergency authorization to continue that activity. We decided that was too risky, so we moved manufacturing out of China — at no insignificant expense.”
The company faced supply chain disruptions as some suppliers hesitated to ship to Teradyne, despite authorisation.