In Yantai on the eastern Shandong peninsula, affiliates of Honhai, Taiwan’s largest privately owned manufacturer, are expanding their printed circuit board production capacity in what will become one of the province’s biggest Taiwanese-owned manufacturing facilities.

Honhai’s decision to expand to relatively undeveloped Shandong province is symptomatic of a re-evaluation among Taiwanese companies of the best location for their mainland investments, as they seek to respond to infrastructure and cost pressures around Shanghai and on the wealthy southern coast, and the need to cater to a growing domestic market.