According to the Taiwan Media Economic Daily, the PCB manufacturers of Xingtan had no early warning before each other. Due to the impact of Huawei's ban, all production lines in Taiwan's factories in China stopped production and sent employees. Mutual announced today that the company violated the relevant provisions of the Labor Protection Law for Mass Dismissal and paid a fine of NT$500,000 in accordance with the communication.

The report pointed out that while PCB small and medium-sized manufacturers were generally affected by the COVID-19 epidemic, they were also affected by the sanctions imposed by the US on the end customer Huawei. It is reported that Huawei accounted for approximately 50% and 40% of the company's total consolidated revenue in 2019 and the first half of 2020. Therefore, the impact of sanctions on Huawei directly impacts mutual operations.

Due to the sudden drop in Huawei’s orders, they said that the company’s capacity utilization rate will be significantly reduced, which will seriously affect the company’s operations. Taking into account production costs, transportation costs, and the regional attributes of end customers, it is decided to merge the existing production lines and relocate the factories in Taiwan. After some orders are digested, production will be stopped and all future production capacity will be moved to Changshu. The production line of the factory in Taiwan will be closed and employees will be sent. It is expected to be proposed at a temporary shareholder meeting on November 11.

Based on mutual evaluation, the factory in Taiwan will be transformed into an operating headquarters. It is estimated that about 600 full-time employees will be repatriated. The estimated repatriation costs will total NT$110 million, and will affect the company’s combined production capacity by 50% (consolidated revenue 50%) ), according to the International Financial Reporting Standard IAS36, the equipment and assets of the company’s factory in Taiwan are assessed and listed as an impairment loss of approximately NT$190 million.