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ASUSTek Computer Inc. (ASUS) is planning to build its own smart factory, a surprising move after the company split its contract manufacturing business into Pegatron Corporation a decade ago to focus on branding. The decision is driven by ASUS’ plan to move into smart manufacturing, alongside smart healthcare and smart retail, under ASUS’ new strategic focus on AIoT since 2018.

According to ASUS, construction of the first smart production line will begin within six months. The production line, located in Taiwan, will cost no more than NTD 3 billion, and will be followed by further capacity expansion. Apart from manufacturing industrial/military grade and medical AIoT products, the planned factory will also provide ASUS the chance to verify its future products, facilitating its gradual transition away from consumer products into commercial ones, which itself requires different supply chain configurations.

The trade war is also another driving factor behind ASUS’ decision to set up a production site in Taiwan, since the high tariffs placed by the US on products made in China has particularly impacted ASUS’ server products. The planned smart production line will also produce servers.