Higher tariffs mean prices of security tools and IoT devices will increase, as was indicated by several manufacturers exhibiting their latest products at Secutech.
Security equipment manufacturers listened up when it was announced on May 12 that the US-China trade war was off, at least for the next 90 days. Import tariffs between the two countries would be rolled back to levels before US President Donald Trump announced steep increases of border taxes on imports from nearly all other countries, but especially China and other Asian manufacturing hubs. This prompted Beijing to increase tariffs on US imports as well, setting in motion a string of tit-for-tat moves.
For end users, higher tariffs mean mostly one thing—the prices of security tools and IoT devices will increase. This was also indicated by several companies exhibiting their latest products at Secutech in Taipei on May 7-9. For the companies, however, it mostly means uncertainty going forward.
The announcement of the tariff reprieve came just days after the companies, mostly headquartered in Taiwan and South Korea, expressed concerns about their exposure to global supply chain turmoil. Despite the latest tariff rollbacks, the main problem remains—low visibility continues to dominate decisionmaking, especially as the border tax issue will likely return to the US-China agenda in July.
“Consumer prices will go up for sure,” said Susan Shih, General Manager at Duen Yih Metal Industrial, a Taiwan-based manufacturer of mechanics for access control systems that works mostly with integrators in the US. “Factory prices, however, will probably go down in the mid-to-long term due to increased competition. I think that's a very realistic side-effect.”
Duen Yih, which markets its products under the Dandy Locks brand, is adopting a “wait-and-see” approach for now, Shi said.
‘Guessing game’
“The changes are too big. On Monday, for example, the exchange rate [between the Taiwan dollar and the US dollar] just dropped. Everyone panicked,” she said. “If you move too quickly, if you adapt too quickly, then you're also in trouble… It's a guessing game right now.”
Duen Yih recently introduced its latest smart lock solutions, featuring palm vein recognition developed in cooperation with its Taiwanese peer Himax, to the US market. They were developed with regulations and specifications in the US in mind, said Shih.
Duen Yih produces in Taiwan and China—a situation that adds another dimension to its considerations regarding US exposure.
Flexible thanks to adaptability
Other Taiwanese companies see the wave of effects of the tariff spat rolling in later.
Rock Chung, R&D Product Manager at Yu-Heng, said the company’s access control solutions can be integrated worldwide, regardless of different voltages and other specs.
“It’s what sets SCS products apart from its competitors,” he said, using the brand name under which Yu-Heng sells its access control equipment.
Yu-Heng is therefore more flexible with regard to market access, Chung explained, adding that the company mostly works with integrators in Taiwan that sell worldwide—including in the US.
Domestic options
EOC, a manufacturer of thermal cameras that markets part of its product portfolio in cooperation with FLIR in the US, said ongoing market volatility is a problem for every company in the sector.
“We'll have to increase our user prices, as does everybody else,” said Michal Shin, CEO of the South Korean manufacturer, adding that this might lead to budget-conscious customers delaying camera upgrades.
EOC recently began selling its solutions for power substations in the US. They include AI-powered IP cameras that can detect fire threats before they ignite and best-in-class user interfaces that can overlay thermal images with RGB images in real time. Production is 100% in South Korea.
In its domestic market, EOC has recently begun to sell end user-focused solutions through telecom providers—potentially a smart move at a time when shipping abroad becomes more costly.
India in focus
Global market volatility might lead to a realignment in the flow of goods—in the security industry and elsewhere. India is an attractive market for many manufacturers, including Secutech exhibitors Eyenix and AVTECH.
Eyenix, a South Korean producer of surveillance camera chipsets, is also focusing on India, where it sees an opening for its budget-friendly components.
“Cameras using our chips are very cost-efficient and don't need much energy,” said Jackie Lim Museong, the company's Managing Director and Strategy Team Leader.
Time-to-market considerations
Another factor that's likely going to help is the Indian government's pivot away from China—including a near-blanket ban of Chinese technology in surveillance equipment. Manufacturers expect the ban to remain in place longer than any specific US-China tariff rates, which might change at a moment's notice. Focusing on India is a long-term move—and it has to be because time-to-market remains an issue.
“Several customers in India have contacted us to see if we can provide a camera solution for the Indian market,” Lim Museong said. “If they want to build a camera using our chipset, we believe it will take them over a year to develop it.”
Alejandro Portillo, Product Division Sales Manager at Taiwanese DVR and NVR-maker AVTECH, also highlighted difficulties entering the Indian market.
The ban on Chinese tech leaves many Indian integrators scrambling for new partners, while the details and scope of the ban, as well as how India will enforce it, remain unclear. AVTECH, however, is confident that its products—which feature a host of AI-powered functions while allowing budget conscious users to integrate legacy devices—will suit the needs of Indian integrators, once they have fully understood the new rules.
“None of them really have a clear idea,” Portillo said. “It's a little complicated, but we'll wait and see what happens. The good thing is cameras are not going anywhere. They’re not only part of security solutions, but also offer other applications… You have so much data and so many opportunities.”
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