Assembly Line

Daikin to wean itself off Chinese-made air conditioner parts

📅 Date:

🔖 Topics: Reshoring

🏢 Organizations: Daikin

Japan’s Daikin Industries plans to establish a supply chain to make air conditioners without having to rely on Chinese-made parts by March 2024, as the manufacturing sector grows increasingly wary of China’s strict zero-COVID policy.

Since the pandemic triggered a global shortage of semiconductors, Daikin has been devising ways to ensure the stable procurement of parts, such as by sharing inventory information among its production bases in each country and developing alternative products. This experience will enable it to cut reliance on Chinese producers.

Furthermore, supply chains for air conditioners are comparatively easy to rebuild as only 3,000 parts are needed in their production, a tenth of that required for automobiles. While moving away from Chinese-made parts will result in an increase in procurement costs, Daikin sees it as security against future emergencies.

Read more at Nikkei Asia